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Strategies & Market Trends : Lizard King's Trading Swamp -- Ignore unavailable to you. Want to Upgrade?

To: TATRADER who wrote (6589)	5/3/1998 10:20:00 PM
From: Christopher	Read Replies (2) \| Respond to of 7396

Mark, Thanks for the info. I am currently concentrating on trends that will last one to two months as a result of a chart formations like rectangle, double bottom(I say this is one of your favorite!!). I have just finished reading an article by Daniel Chester in the magazine "Technical Analysis of Stock & Commodities". He discusses what he calls "Identifying Significant Chart Formations". He recommends consulting ADX 14 days just prior to the breakout to see if the chart pattern would break thru the trendline or not. He says if ADX is below 15 then it is a good indication that a good breakout may occur. He argues that if ADX is below 15 then you have low volatility and that for chart pattern to break out they need low volatility. He also says that you need at least two cycles in the pattern. The trendline you create must only use highs and low. He also suggest using a 50 day MA. If the chart pattern is above it then it is good indication of breakout to the upside and the opposite is true. In his article he is trying to minimize subjectivity when dealing with chart patterns. What looks like a double bottom to you may look like a wedge to me. By drawing trendline that connect only highs and lows then you reduce that subjectivity as an example. Thanks again and good luck with your trading. Chris