Trends, Retracements and Reversals

By: Chris Irvin, Veteran Instructor & Trader at The Wizard

When we are looking a social media and pop culture it seems that trends change by the minute.  I read recently that the seniors leaving collage this year believe that email is dead.  It is essentially the snail mail of the 21st century and has been replaced by texting.  Waiting for an email response just takes too long.   As I get older, it takes me longer to identify trends, and I often miss the signals that they are coming to an end.  Just ask my kids – they will agree with me.

When it comes to the stock market some people suffer from the same difficulties.  They cannot see the market trends and have a tough time seeing the signals that those trends are coming to an end.  This is a critical skill in the trading world.  The truth is that everything is trending.  It does not matter if you trade stocks, currencies or futures, in some timeframe there will be an observable trend.

In this blog we are going to discuss the definition of a trend, and more importantly how to recognize the difference between “Retracements” and  ”Reversals.” Continue reading "Trends, Retracements and Reversals"