Tuesday, October 28, 2008

Trading Tick & AD Line Convergence

Throughout today's trade (like every day), I discussed the importance of confirming price trends with the Cumulative Daily Tick (second subpane) and Advance-Decline lines (cyan line/ third subpane). These can be terrific guides, particularly in the wide-ranging directional environment we have been witnessing.

The chart below presents how the slope convergence of the two indicators may have been used today, with each vertical dotted line representing a confirmed trend change:

P.S. - Don't be fooled by the middle two trades, look closely... veritable "scratches."

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