{"product_id":"v06-c04-pricere-pdf","title":"V.6:4 (136-137): Price reactions within a trend by Bill McLaren","description":"Price reactions within a trend\nby Bill McLaren\u003cbr\u003e\u003cbr\u003eI have, in the past decade, taught trading techniques to many students. Recently, most of my students\nhave entered the markets after purchasing a personal computer and a technical analysis software package.\nThese tools can be quite helpful but they are not the Holy Grail. A majority of my students' losses are\nrelated to one major weakness: little understanding of basic price movement.\u003cbr\u003e\u003cbr\u003eUnderstanding price movement is the foundation of profitable trading and all else must be built on that\nfoundation. Very simplistically, both stock and commodity markets move in only two waysthey trend\nor consolidate. You can view this from three perspectives: short-term (daily charts), intermediate-term\n(weekly charts) and long-term (monthly charts).\u003cbr\u003e\u003cbr\u003eFirst, though, you need a discipline to measure short-term trends. In a powerful, short-term trend, the\nnormal correction against that trend is three to four days, or 90 hours, which is one of the natural time\ncycle harmonics proposed by W. D. Gann. A movement that falls within the three- to four-day period is\nassumed to keep the strong trend intact. A shorter correction then indicates a stronger-than-normal trend,\nand a movement exceeding the fourth day indicates the trend may go into a consolidation or reversal.\n(This concept of normal movement against a powerful trend can be applied to weekly and monthly charts\nby using three to four weeks and three to four months as the normal lifespans of intermediate and\nlong-term corrections.)","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52133779472753,"sku":"\\V06\\C04\\PRICERE.PDF","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_2f5bbefe-e557-4a9c-ab69-f21da7ae6910.jpg?v=1739652250","url":"https:\/\/shop.traders.com\/products\/v06-c04-pricere-pdf","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}