《SwingTrading(摆动交易法英文版)》.pdf

Swing Trading with Oliver Velez email - editors@ Introduction In this section, we will reveal a few simple keys to understanding how the market works. The following concepts form the cornerstone of any and every sound trading technique or tactic. After gaining a clear understanding of these building blocks, the trader will never again find himself confused and not knowing what to do. In fact, once these powerful but simple concepts are mastered and understood, the trader will rarely find himself on the wrong side of the market. And over 65% of all trading losses can be attributed to being on the wrong side of the market. Understanding Candlesticks Commentary The main difference between Japanese Candlestick analysis and Western Bar Chart analysis is that the Japanese place the highest importance on the relationship between the open and close of the same day, while the Westeners place the importance on the close as it relates to the prior periods close. NOTE: As long as the underlying stock closes higher than the prior days close, Western thought says its positive, however, according to the Japanese view, this is not necessarily the case. If, on an up day, the stock closes below its open, the Japanese would regard it as negative. EXAMPLE: Mondays close = $39. Tuesdays open = $40.75. Tuesdays close = $39.75. The Western view: Positive action because the stock was up 3/4 on the day. Japanese view: Negative action because the stock closed sharply below its opening price of $40.75. IMPORTANT: We regard the latter view as more accurate and useful for traders. This is why we exclusively use candlestick bar charts in our trading analysis in all time frames. 3 Primary Trends - Building Block Two There are only three things a stock can do: go up, go down, or go sideways. 1. Up Trend - Defined by a series of higher highs and higher lows. • The Up Trend is better known as Stage 2. 2. Down Trend - Defined by a series of lower highs followed b