Author: Brenda Jubin (Bethany, C..
Unless markets are absolutely comatose they swing. There are swing points in uptrends, downtrends, and sideways movement. Ideally the short-term trader buys close to the low swing points and sells close to the high swing points. The savvy trend trader ignores the minor swing points; he simply has to identify when he is about to overstay his welcome. All this is patently obvious in hindsight, hellishly difficult at the hard right edge.In Trend Qualification and Trading: Techniques to Identify the Best Trends to Trade L. A. Little offers what he calls a neoclassical model of trends that relies in large measure on defining and qualifying swing points. The classical model, developed and popularized by Charles Dow and his followers, has of late morphed into what one might call the reductionist classical model: "A trend is evident when two consecutive sets of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend) occur within any given time frame." (p...Read more