Understanding of time models and how to incorporate them into your strategy takes the time to get used to. Without a sense of time, large portfolios become harder to manage. Without an understanding of the dynamics of time, the only options are to buy and hold. There is also the added risk of losing everything in a transitional phase. It is essential to know when changes will come and when to begin shifting your direction to meet the unfolding event.
Resistance and support targets can be derived from your technical analysis, but relying on this subjective analysis to peer into the future is not always the best practice. All forms of this personal analysis are subject to individual interpretation, making them somewhat problematic.
Some people assume that future predictions made in the short term are accurate, the same people are reluctant to rely on predictions made in the long term. The familiar argument is that the most important political actions can not be predicted beforehand. Nevertheless, these very events would not even occur if there hadn't been an economic situation in steep decline.
While a computer assessment will not reveal the exact events that will happen in a particular economic condition that results in a revolution, they can indicate when a political situation will arise as a consequence of a specific economic pressure.
Time, contrary to popular belief, quantitative long-term forecasts have been more accurate than those made in the short term. This is because long-term trends are the direct result of a combination of forces, once set in motion these trends can't be stopped or avoided easily. Short term trends, on the other hand, could be the result of noise.
Traders can be excited easily. If they are convinced a trend is coming to an end, they will rush off on a fool's errand. Then the trend can fizzle out fast, and all participants quickly bail out, this leaves the market to revert to its original course and long-term trend. So, where the short-term trend is volatile and active, the long-term is far more predictable and steady.
The important thing to understand about these time models is how fractal they are in their construction. A single market can present a wide variety of timing frequencies produced by minor trends which are the result of various marketing campaigns. The long-term trends will always overpower the short-term trends. This leads analysts to understand that long-term trends are far more reliable as they are harder to change.
The forces that act on these trends are always opposing forces. These forces act as a self-propelled pendulum that swings between two points. There are typically two hardcore groups in a market separated by a more flexible group that can change their minds and act independently. It is this groups that will provide the moving force in time.
There are intraday traders who can make many trades in a single day. These same traders will not stick to one spot overnight. Many of these traders will be found on the long side of the market. These traders add liquidity to the market, and this adds confidence to the longs. And trends can even be produced within intraday price movements.
Innumerable different trends are acting on the internal market and a full spectrum of other influences coming in from related and unrelated markets across the globe. As time progresses, we begin to see these micro-trends combining to form larger trends. These more complex composites are not as easily altered.
Because markets are made of many individual trends, it is the individual's capacity for recognition that will ultimately determine their success or failure in the online markets.
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