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Markets echo similar patterns over and over again
The science of trend allows you to build systematic rules to play these repeating formations and avoid the chase:
1. Buy at support, sell at resistance
Everyone sees the same thing and they’re all just waiting to jump in the pool .
2. Short rallies not sell offs.
When markets drop, shorts finally turn a profit and get ready to cover.
3. Don’t chase momentum if you can’t find the exit
Assume the market will reverse the minute you get in .If it’s a long way to the door , you’re in big trouble .
4. Trends test the point of last support/resistance.
Enter here even if it hurts.
5. Trends with the TICK not against it.
Don’t be a hero. Go with the money flow.
6. If you have to look, it isn’t there.
Forget your college degree and trust your instincts.
7. The trend is your friend in the last hour.
As volume cranks up at 3.00pm don’t expect anyone to change the channel.
8. Price has memory
What did price do the last time it hit a certain level? Chances are it will do it again.
9. Bottoms take longer to form than tops
Greed acts more quickly than fear and causes stocks to drop from their own weight.
10. Beat the crowd in and out the door.
You have to take their money before they take yours, period.
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