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Trend Change and Predictive
Techniques
Try GRAFster5 for free and and see for yourself
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The
'Kombo' indicator on this chart mimics 'Combo', and 'Ceequential' is
an implementation of 'Sequential',
techniques
created by T. DeMark. Completed Buy/Sell countdown patterns are
marked with colored arrows. They are used to
mark price 'exhaustion' zones and likely reversal points. These two
'predictive' methods are worth
pursuing when used together or with other confirming indicators, of
course. GRAFster5 lets you show both on the same chart for more
signals. And it is effective in any timeframe. More info is
given on the Tips
Page or get the GRAFster5
Help file for a detailed
explanation.
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The yellow lines lines are
smoothed volatility bands. They expand and contract with changes in the
standard deviation of bar to bar price changes (i.e. volatility). These
bands can be interpreted to mark possible trend change levels. That is,
DOWN trending
prices tend to reverse when price (a close) breaksout above the
upper band.
Likewise, UP trending prices often reverse when price (a close)
breaksdown below
the lower band.
Volatility bands may also be construed to mark prices that have moved
too far (i.e.
outliers) and have a good chance of reverting back to average values.
Recall the Regression to
the Mean principle from statistics?
The colored horizontal lines mark possible price support and resistance
levels. UP trending prices show green
support lines and
DOWN trending prices show red
resistance lines. Breakdowns below support and breakouts above
resistance suggest a trend change is
taking place.
Consider using these lines alone or together as confirmations of other
signals, like the
'Kombo' Bottom/Buy and the 'Ceequential' Top/Sell on the CELL chart
above. |
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visiting! Come back
and check for updates.
Last updated
Sept 16, 2007
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