After each price thrust, odds decrease that the trend will continue. Oscillators measure the depth of this overbought condition and provide early warning when a pullback lasts too long. Set these indicators to watch the same signals that other traders use to make their decisions. Then plan your trades to step in front of their reactions. Moving averages and Bollinger Bands measure how far price should pull back before reversing in the direction of the trend.
Trends tend to find support at similar levels on each correction.
Use Moving Average Rainbows to identify the right settings for each unique pattern. He publishes The Hard Right Edge premier web site for trader education, technical analysis and trader resources featuring both Morning Trader and Traders Workshop. Alan also authors on-line training technical analysis in association with independent sites. In addition to writing, he is an outstanding speaker and lecturer on short term trading strategies. All Rights Reserved.