You have to always always follow trend, absolutely, never wavering [except for FA considerations, whimsy, and the phase of the moon] ... but which scale of trend? - there is a spectrum -
Macrotrend - looking ahead/back say 5 years and up
Majortrend - 1.1 to 5 years
Yeartrend - 12mo chart
Minortrend - 3 or 6 months or so
Microtrend - maybe 3 days to 6 weeks
Nanotrend - say a 60min overall assessment of the 1min chart
Pick any stock for example, it will not spend three days trending up or down in all these categories, no exceptions ... a simple downtick from offer to bid instantly blows the Nanotrend, and there you are, the picture is mixed, it's trending one way yes but on other scales it is trending the other
This is where we get into subjective/experiential differences about which scale of trend is more important right here right now - if you say Microtrend is better than Minortrend because it's what's happening now baby, well fine, then by logical extension [shorter period = more validity] the moment it downticks and Nanotrend is broken the trade last dictated by Microtrend must be unwound? ... and so on up/down the line
There is ranging to consider - stocks tend to range up and down within trend channels [of whatever period, actually ranging could be defined as trend of a shorter period being opposite to that of longer ones], juniors often range wildly, commonly well over your 20%, and both ways, up on drillbit or other enthusiasm, down into temporarily weak bids when nobody loves em for whatever reason ... and then they often come right back to the other side of the trend channel [which is what makes the trend channel by definition] ... imho ranging is at least as important as trending, especially in the computer age where we're all poised over the buy/sell buttons, there is a great deal of opportunity for profit in letting a few of even your favourites go when they run, even if they're 'trending well', because then you'll raise some cash to pick them back up later cheaper, even though they're 'trending badly', i.e. their Nano-, Micro-, Minor-, or possibly longer trends suck bigtime
It just depends ... trends can turn in a flash, as can FA factors, and not always together, though ultimately one will reflect the other ... i wouldn't sell epm.to here, and won't in my own p.f., the idea is quite absurd to me, it's far too late in the Nano- through Yeartrends, trends are still intact in Major- and Macrotrend, now we're coming into a bottom, which a squint 'n guess look for symmetry in lining up of the '05 and '06 bottoms says could be around .78-.80ish
Where personally i will have bids not offers ... any negative change in FA, and an instant switch to Plan B, of course ... but absent that, and i don't think it likely, here's a prediction - epm makes a longish white candle either this week or the next, or both |
