Like a fine wine the surety of a trend reversal gets better with time. The more a trend has aged, the more likely you are to get a valid reversal.The older a trend gets the more ripe it is for falling off, and the more likely a new more robust trend will take over. A trend that is young and vigorous maybe side tracked briefly, but is not very likely to be defeated. The end of the uptrend says that the last of the big buyers are gone and the end of a down trend says that the last of the big sellers are gone and that trend has now become ripe for a take over.
Think of a trend like a young lion protecting his pride, another lion is not likely to usurp his authority. As he gets older, he is much more likely to lose his pride in defeat to a younger more energetic lion. The same is true with a trend as it gets older it becomes much more likely to be taken over. When considering whether or not to take a reversal (especially in the short term) gauge the age of the trend first. If the trend has just begin then you are not likely to have a legitimate reversal on your hand. If the trend is still very close to the trend line then it is not likely to be a valid reversal.
There are no absolutes in the market, but you do need to keep an eye out for things that put the odds the most in your favor.
YOU CAN DO THIS (^_^)
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I really love this story....superb....
ReplyDeleteThanks for being such a wonderful person for all of us.... inspirational.. Cheers!!!
-Kushan-