Trend of 1 Larger Degree
Bullish Impulse Wave Pattern
I discuss the “trend of 1 larger degree” on several other webpages throughout the members area. Determining exactly where you may be in a chart pattern or a wave pattern can provide huge trading advantages.
When you learn the Elliott Wave complete 8 wave cycle and the characteristics of the different waves, it can help you identify the trend and also the degree of trend for a stock’s share price. Having peace of mind if you miss a short-term sell signal because you know the longer-term degree of trend is still upwards can be worth its weight in gold at times.
In the below illustration, I demonstrate how a Bullish Impulse wave pattern can develop on many different layers or degrees. The same Bullish Impulse wave pattern can develop on a 5 minute candlestick chart, a daily candlestick chart, a weekly candlestick chart and a monthly candlestick chart.
When you begin to recognize chart and wave patterns on one level or degree of trend, it can sometimes lead to recognizing the overall degree of trend. If you do not recognize any patterns on a daily chart, switch to a weekly or a monthly chart and change views. Sometimes a pattern in easier to pick up at first from a certain viewpoint.
Identifying the Trend of 1 Larger Degree
Consider the following questions when analyzing the “trend of one larger degree“:
- Are the daily, weekly and monthly charts all in agreement? Or are there conflicting viewpoints?
- What does the trend look like now on the weekly chart compared to the monthly chart?
- What does the trend look like now on the daily chart compared to the weekly chart?
- Did the trend reverse on the chart of 1 larger degree also?
- If not, the current pullback is not one to sell.
- If so, you may want to start trimming positions into any strength. Review each stock chart individually for sell targets.
- If not, the current pullback is not one to sell.
- Is the weekly/monthly trend still strong and therefore the reversal candlestick pattern represents just a shorter-term counter-rally?
Answering the above questions can begin the process of identifying your company’s trend on all degrees.
The single, most important tip that I can provide to help identify a trend on all degrees is this:
Large volume spikes tend to happen at 1 of 3 places – at the beginning, middle or end of a trend. Determine which of the 3 places best suit the volume spike you identified. Large volume spikes are key indicators for helping to identify the degree of trend.
