The Alternation in the Elliott Wave Theory
Alternation is an element of the Elliott Wave Theory and is a nature’s law. As the same way that bull market alternates with the bear market, corrective waves alternate between them. In this article, we’ll talk about the alternation principle and how it works. The Basic Concept The alternation is a nature’s law that we…
Detecting trends – Bollinger Band Channel
We already touched channels made by two trendlines as a mean to assess the current trend. There are other computationally friendly channel types that allow early trend detection and trading. One of my favourites is the Bollinger Band channel. The Standard Bollinger Band A Bollinger Band is a volatility channel and was developed by John Bollinger,…
Detecting trends – Moving Averages
Moving Averages (MA) Some centuries back, Karl Friedrich Gauss demonstrated that an average is the best estimator of random series. Moving averages are used to smooth the price action. It acts as a low-pass filter, removing most of the fast changes in price, considered as noise. How smooth this pass filter behaves, is defined by…
Detecting trends – Trend Lines
Detecting trends – Trend Lines discusses trend lines, the proper way to draw them and how they help to assess the direction of the trend. Introduction On past articles, we’ve set the foundations of market classification, defined what a trend is about, and dissected a trend in its component phases. Then we talked about its…
Candlestick patterns – Umbrella Lines
Umbrella Lines Umbrella lines are candles that show very long lower shadows and small bodies near the top of the trading range. This kind of candles is very interesting as it may be bullish or bearish, depending on price location. If it appears during a downtrend, it’s indicative of the end of it. In such…