The most effective way to analyze trade markets a few decades ago was to look at the number of bushes in a warehouse, current demand figures, expected output, and so on. It was widely believed that such foundations should be defined. Many did not find Technical Analysis useful. The reasons given were that the price action was random or did not take into account the underlying factors of the asset. The facts are quite the opposite.
Many have come to learn that the old ‘buy and save’ strategy can be costly. There are many stories of those who found the value of their portfolio, only to break (or lose value) after a few years of storage. The financial crisis of 2008 marks one of the historic periods when investors lost millions. While it’s always a good idea to know a company’s financial health, as well as its future potential in sales / profits, what a healthy financial statement and outlook might look today may look very different tomorrow.
Technical analysis focuses on price movements, waiting for the price direction based on ups and downs (ie swings, periods, etc.). Because the market lowers everything, the main factors of any asset are built on price movements. In addition, history tends to be repetitive, and this repetitive nature of price action can be expected and benefited.
Many technicians rely on a variety of indicators to help uncover some aspects of historical price data for the use of time. While one indicator may show some key periodic pattern that can help you wait for the next trend to change, another indicator may indicate that the markets are oversold or oversold, relative to all past price movements.
The technical analyst is mainly based on price charts. Some examples are often repeated, giving a specialist a potential price break. These types of patterns include ‘head and boats’ pattern, ‘wedge’ or ‘flag’ formation, and so on. Some names are given. All these technical approaches are to some extent useful.
Accurate market time is very important in today’s volatile markets. Without more precision in time, a trader is exposed to a higher level of risk and can leave more profit on the table.
Let me do that.
For the sake of discussion, let’s assume that the price range for each trading day is 50 points. If your allowable risk (how much you will allow the market to move against your position) is 50 feet, you should enter the market on the day you expect the move to start in your favor so as not to stop at a loss. If your allowable risk is 100 feet, you need to make your time exactly +/- so as not to stop at a loss for a day. This underscores the importance of accurate market time.
Now, in real life, the price range changes every day from the next day. Depending on how effective your market-time approach is, you can take less risk than the average range of points. The more accurate the market time approach, the more risk you must take in trading first.
Market time itself can be easily done using standard technical indicators, trend lines and moving averages, accurate market time can be obtained with good market forecasting methods. For market time purposes, market forecasting is extremely effective because, unlike most technical indicators that are ‘leading’ or ‘lagging’ in nature, a good market forecasting method predicts that the market will return to an exact day of trend change. Giving any market forecasting method a small +/- daily deviation reserve can give any trader an incredible advantage in predicting market returns with accurate market time and trading purpose.
Some traders are historical legends who used market forecasting methods for accurate market time purposes. Who hasn’t heard of William Delbert Gann (better known as WD Gann)? This financial trader is known for developing several technical approaches, such as the use of Gann angles or trend indicators. Its forecasting methods include the use of Nine Squares, period analysis and market geometry. Using these and other ‘market forecasting’ tools, it is popularly reported that many times a small amount of money is converted into a large amount very quickly.
So, there are two main points you can get by reading this article. Point 1 is that you need to be more precise with a market-time approach to better manage your risk and maximize your profit potential. Point 2, the most accurate way to bring markets to time is to take advantage of market forecasting techniques, where you can often set your trade to the exact day of a new move.
There are many market forecasting secrets, methods and techniques you can learn now to improve your market time. Some are good, some are not so good. I spent more than thirty years learning, testing and finding market forecasting approaches. When I started, there wasn’t much like now. So you’ve definitely seen some growth over the years, so you shouldn’t have a problem finding approaches that fit your trading and investing style.