OnLine Cycle Analyst's Seminar - Trend and Price Swings- 2

Viewing Instructions:
Click on the Real Media Audio link below to begin; click Next to go to next chart. Before clicking on the audio link, allow the chart to fully load. If the charts do not download completely, right mouse click and choose "refresh".

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Swings show the direction of trend -- in hindsight -- but also show the continuation of trend. When a swing high is exceeded, the uptrend is continuing. If a new swing high does not exceed the previous swing high, the uptrend may be reversing. When a swing low is taken out, the downtrend is continuing. If a new swing low does not take out a previous swing low, the downtrend may be reversing.

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Follow the swing highs and lows to see if you can identify a pattern or patterns that identify trend reversals. In this lesson we are only using swings for trend and trend reversals but in real-time trading the markets, there are a number of different trading tools and techniques to determine trend and confirm and trend reversals. Some of these are covered in our markets analysis that follows.

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These specific patterns most often do indicate a trend reversal.

• Following a swing low, prices exceed the previous swing high.
• Drop below the first swing low
• Prices fail to exceed the previous swing high, and drop below the second swing low to indicate a downside trend reversal.

• Following a swing high, prices drop below the previous swing low.
• Exceed the previous swing high.
• Prices fail to drop below the previous swing low, and rise above the second swing high to indicate an upside trend reversal.

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One technique for determining trend reversals is the standard trendline. However, 3-point trendliens are much more significant than a 2-point trendline. In both the uptrend and the downtrend, the 3-point trendline would have been another contributing factor to the confirmation of a trend reversal.