Knowing Which Time Periods To Trade ...

By: Solomon Thallon

You should always figure the time from any top or high level to the next top or high point. Also figure the time from any low level to the next low level. Then figure the time from a low level to a high level and the time from the last high level down to the low level.

By doing this, you will know when time periods balance or come out about the same as a previous move. This is balancing of time. By knowing these dates and prices, it will help you to determine the duration of the next move. The longer the period of time that elapses before a previous high level is crossed or a previous low level is broken, the greater the advance or decline which follows.

PRICE SWINGS OVERBALANCED

When prices have advanced for a considerable period of time and have made several reverse swings, the first time a reverse swing or reaction exceeds the previous downswing, it is an indication that the trend is changing. But never consider that the trend has definitely changed until the time period has overbalanced. Example: If prices have been advancing for a considerable time and there have been several reactions running 5 to 7 days, then a downswing starts and runs more than 7 days, it is an indication that the trend is changing, at least temporarily. If the price reaction had also overbalanced, then it would be a definite indication of a change in trend, either minor or major.

In a declining market, keep account of all the rallies and how many cents the market has rallied from time to time and also record the time period of each rally; then when the low is reached and the advance exceeds the previous rallies in a bear Bear Market, it is an indication that both price and time are overbalanced and the trend is changing.

Remember that all rules work best when markets are very active and near extreme high or extreme low levels. Changes in trend which occur between extreme high or low do not mean as much as a reversal when prices are near extreme high or low and are very active.

Happy trading,

Solomon Thallon
HotTrader, Australia

source : http://www.afsd.com.au/