| Posted in PREPARING FOR THE MARKET DAY | Posted on
Greed resists adequate trade planning and precise time execution. But consistent discipline pulls
attention back to center as it marks the divide between success and failure. A neophyte may build
false confidence by throwing money at hot stocks and flipping nice gains. Guess what? Short
phases of the broad Pattern Cycle allow this strategy to work. But their reckless approach fails
quickly as soon as momentum fades and swing traders empty their pockets with powerful 3D
charting techniques.
Three-dimensional charting forces the swing trader to recognize trends through different time
frames and evaluate how their interaction will affect price movement. Landscapes of support and
resistance reveal hidden swing levels ripe for profitable trade entry. 3D charts pack layers of
complex information into very small spaces to reveal these hot spots quickly. Through visual
analysis, the trader finds where moving averages, retracements, price bands, bar patterns, and
trendlines cross or converge with each other. These isolated time/price zones provide the
playground for profitable entry.
Each element of the charting landscape has a distinct appearance. Take time to learn the special
message that each one displays as these diverse forces interact with each other. Also become
sharply aware of their limitations. The most memorable trades come when an indicator’s message
can be confidently ignored and informed instinct guides position management.
Toggle between arithmetic (linear) and logarithmic (geometric) charts frequently. Log charts
examine percentage growth. The visual length between increments decreases as prices move higher.
Linear charts examine price growth. The visual length between increments remains constant as
prices move higher. Trendlines can form on either log or linear charts. If uncertain which view will
yield the best information, apply this helpful rule for quick analysis: stick with log charts for lowpriced
stocks or stocks that experience significant price change over short periods of time, and rely
on linear charts for higher-priced or slower-moving stocks.
Information panes below price bars serve a single purpose: to assist the investigation of the top
pane. Use indicators to support the pattern analysis and not the other way around. Many market
participants search so hard for mathematical perfection that they lose their ability to see. Above all
else, technical analysis is a visual art. Always start trade preparation with a peek at the price bars
first. If something catches your eye, then check the lower pane to find out whether it confirms or
refutes the observation. Less-experienced players must cast out opportunities when lower-pane
measurements don’t support objective observations. But after experience grows with lower-pane
indicators, judiciously ignore them when the pattern tells a different story.
attention back to center as it marks the divide between success and failure. A neophyte may build
false confidence by throwing money at hot stocks and flipping nice gains. Guess what? Short
phases of the broad Pattern Cycle allow this strategy to work. But their reckless approach fails
quickly as soon as momentum fades and swing traders empty their pockets with powerful 3D
charting techniques.
Three-dimensional charting forces the swing trader to recognize trends through different time
frames and evaluate how their interaction will affect price movement. Landscapes of support and
resistance reveal hidden swing levels ripe for profitable trade entry. 3D charts pack layers of
complex information into very small spaces to reveal these hot spots quickly. Through visual
analysis, the trader finds where moving averages, retracements, price bands, bar patterns, and
trendlines cross or converge with each other. These isolated time/price zones provide the
playground for profitable entry.
Each element of the charting landscape has a distinct appearance. Take time to learn the special
message that each one displays as these diverse forces interact with each other. Also become
sharply aware of their limitations. The most memorable trades come when an indicator’s message
can be confidently ignored and informed instinct guides position management.
TABLE
Holding Period and Chart Correlation
Trade Type Holding Period 3D Chart Combination
Scalpers Seconds to minutes 1-minute 5-minute 15-minute
Day traders Minutes to hours 1-minute 5-minute 60-minute
Position traders Hours to days 60-minute daily weekly
Investors Days to weeks Daily weekly monthly
Institutions Weeks to years Weekly monthly yearlyHolding Period and Chart Correlation
Trade Type Holding Period 3D Chart Combination
Scalpers Seconds to minutes 1-minute 5-minute 15-minute
Day traders Minutes to hours 1-minute 5-minute 60-minute
Position traders Hours to days 60-minute daily weekly
Investors Days to weeks Daily weekly monthly
Toggle between arithmetic (linear) and logarithmic (geometric) charts frequently. Log charts
examine percentage growth. The visual length between increments decreases as prices move higher.
Linear charts examine price growth. The visual length between increments remains constant as
prices move higher. Trendlines can form on either log or linear charts. If uncertain which view will
yield the best information, apply this helpful rule for quick analysis: stick with log charts for lowpriced
stocks or stocks that experience significant price change over short periods of time, and rely
on linear charts for higher-priced or slower-moving stocks.
Information panes below price bars serve a single purpose: to assist the investigation of the top
pane. Use indicators to support the pattern analysis and not the other way around. Many market
participants search so hard for mathematical perfection that they lose their ability to see. Above all
else, technical analysis is a visual art. Always start trade preparation with a peek at the price bars
first. If something catches your eye, then check the lower pane to find out whether it confirms or
refutes the observation. Less-experienced players must cast out opportunities when lower-pane
measurements don’t support objective observations. But after experience grows with lower-pane
indicators, judiciously ignore them when the pattern tells a different story.
