“Trends are like horses; they are easier to ride in the direction they are going.”
Most people, when investing in a stock, believe that they are forming a relationship with a company. So they try to learn all that they can about the company and its prospects. But there is a more significant relationship that they are forming, and that is their relationship to all of the other people who own that stock. Those people can have a profound effect on the success of one’s investment, irrespective of what the company itself actually does. Trend analysis is a way of studying the personality of these investors by observing their past behavior.
Previously, you viewed individual price bars as expressions ...