Archive for the ‘patterns’ tag
MARKET PATTERNS
A trade that lasts from 1 to 3 days can be improved if short-term patterns or cycles can be found. For example, in a trending market there are outstanding weekly and weekend patterns. It is most common to find that the price movements from Thursday to Friday (closeto-close) are in the direction of the major trend and that the movement on Monday is a continuation of that trend. By Tuesday (or sometimes Wednesday), the strength of new buyers or sellers has faded, and the market reverses due to lack of activity and some profit taking. It often stays in this state through Wednesday or early Thursday when it a~ resumes the trend. In a sideways market, the Friday and Monday directions differ from the direction during the prior week and often differ from each other.