Financial markets cycle through a finite number of bull and bear conditions. From trends that last a few seconds to those that persist for decades, prices will rise or fall through a limited variety of chart patterns. These broad mechanics persist through all exchanges that print trends of buying and selling behavior.
Take a moment to internalize this classic wisdom. You'll realize that technical trading is much easier than you ever suspected. Start now to organize price movement through these repeating Pattern Cycles. This discipline will quickly free your market vision from the chaos seen by an untrained eye when looking at the same information.
Common elements appear as each trend evolves. Support-resistance prints and often bounds price to the same levels as past movement. These constricted zones eventually break, leading to price expansion in the direction of the greatest supply or demand. Fortunately this powerful mechanism doesn't leave sleeping traders behind. Routinely, these breakouts pull back to their violation points and allow late passengers to jump on board the fast-moving train.
Pattern Cycles present a powerful method to forecast direction through all phases of price development. These market stages exist because the 3-D charting landscape evolves through predictable crowd behavior. Since price cannot travel upward to infinity nor downward below zero, well-marked ranges develop within each time frame. Trends slowly awaken at these narrow levels and shoot forward in emotional waves.
Pattern Cycles feed off an axis of chart polarity to simplify decisionmaking. Use this interaction to register market trends quickly and see profit setups at logical interfaces. Pattern Cycles offer a potent visual tool that unites left and right brain functions. The pattern-trained eye intuitively sees natural execution levels that then verify through objective measurement. No complex or math-based trading system responds more quickly to changing price in real-time market conditions. Recognize these common stages of trend development and you'll find promising trade setups in every time frame and market.
Greed and fear drive the engine of market rallies and selloffs. The emotional crowd generates constant imbalance on the price chart that provides a rich source for profits. This herd behavior builds the repeating formations that skilled technicians uncover through Pattern Cycle analysis. But finding promising trade setups is only the first step. You must also define a competitive relationship with the crowd before you can take money from the markets. This requires understanding how professionals may fade popular response to common chart patterns.
Stand apart from the crowd at all times. Be ready to trade ahead of, behind or contrary to your competition. Be the first in and out of the profit door. Learn how to take the crowd's money before it take yours. And always stand ready to pounce on its ill-advised decisions, poor judgment and bad timing. Your success depends on the misfortune of others.