A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits

Pattern Cycles

The predictability of a consistent set of random variables among holdings in an equity portfolio is going to be accurate under a set of further assumptions. These include the following:

• The equities selected were all subjected to the same selection criteria.

• These selection criteria affect all equity positions in a similar manner.

• The initial criteria and effect have not changed since positions were acquired.

These variables point out that even subtle differences between equities may lead to inaccuracies in interpreting factors that influence trends. The use of diversification and asset allocation builds in normal differences among equities in initial selection criteria, their effect, and consistency over time. This variability ...