Rule 1 - If you cannot see trends and patterns
almost instantly when you look at a chart then they are not there. The
longer you stare, the more your brain will try to apply order where
there is none.
If you have to justify exceptions, stray data
points and conflicting evidence then it is safe to say the market is not
showing you what you think it is.
Rule 2 – If
you cannot figure out if something is bullish or bearish after three
indicators then move on. The more studies you apply to any chart the
more likely one of them will say “something.” That something is probably
not correct.
When I look at a chart and cannot form an opinion
after applying three or four different types of indicators – volume,
momentum, trend, even Fibonacci – I must conclude that the market has
not decided what it wants to do at that time. Who am I to tell it what
it thinks?
Rule 3 – You can torture a chart to say anything you want.
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