New Idea To Find Trend And Strenght Of Trend: Conceptual
Saturday, March 3, 2012 | | 0 Comments |Advertisement
Momentum of price is one of the finest factor to determine the change in trend and duration of trend. Normally most of us are overlook the momentum of price. Rate of change in price is define the something particular momentum of stock or Index price.
After opening bell of stock market prices are start to gain their respective momentum accordingly sentiments of investor, news, global scenario and such various factor. Some factors are underneath of mind and behind the approach of commonn trader. Change in price is only real result in front of trader. Now we can check style of move of stock through momentum of price change.
First relax your mind look at the figures and space of between each high and low of small rallies. You can slowly understand how much price change with each cycle of high and low. Calculate the diffrence between each high and low. Now compare the diffrence of each rally to each other. It does not need exact figure of diffrence. You can use the graph from http://finance.yahoo.com.
Comparision between each small cycle's diffrence gives idea about strength of current rally. So you can predict high and lows of current rally approximatelty. Momentum will define when high and low will occur.
For example
If you drive bike on straight road with constant speed 50 kmph. Now road have turning next now you must decrease the speed less than 50 kmph. It will done the change in momentum. So you can assume that each turning reduced the speed in ideal condition.
Now you don't know the next turn of road, but on road another bike is ahead of your bike. By watching at those bike and it's speed's change, you can predict the turn from distance.
Exactly same phenomenon you can use to judgd the change in trend in stock market. Just you have to look at momentum and changes in momentum at the time of high and low. So you can easily predict the trend next time.
This simple idea can help you to earn good profit than doing trade randomely on hope.
I try to my level of the best to express my thought in front of you through this article. This is principle level thought. I am als working on this concept. I will share with you new improvment as it take place.
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