It is about knowing how to apply thoroughly the trading triangle in all trading decisions.
If one is trading Forex, stocks, commodities or any other financial instruments, one must first trade the market. The market watch involves paying attention to all seven markets leaders before making a trading decision.
It is also about knowing how one can accurately use the six critical price levels. Top down market analysis is the best approach. This is about the market's analysis before the sector and the individual financial asset.
No serious market analyst can disregard the leaders, the fundamentals
and the economic news
1/Smart high (SH) is the range of the current five years including the current year.
2/ Smart low (SL) is the low of the range of the current five years.
3/ Smart range (SR) is the range of the current five years.
4/ CPL 1 is the first critical price level. It is the opening price of the previous year.
5/ CPL 2 is the closing price of the previous year. It is the second critical price level.
6/ CPL 3 is the third critical price level. It is the high of the previous year.
7/ CPL 4 is the low of the previous year but also the fourth critical price level.
8/ CPL 5 is the opening price of the current year. This is the fifth critical price level.
9/ CPL 6 is the sixth critical price level, the most influential price level but also the technical fair value of a financial asset. It is the smart median line or SML. All critical price levels are crucial for a successful
SML = [(SH-SL)/2] + SL
(Smart high minus smart low) divided by two plus smart low
DSML is a dynamic smart median line. It is a smart median line
that is changing. When there are more than one smart median
lines in a year, the first SML is the root smart median line or
RSML. Every other SML above or below the RSML is a DSML.
The result of an expanding smart range (SR) is a new DSML.
A dynamic bullish or bearish financial asset, can create many
dynamic smart median lines. However a financial instrument
that is consolidating on the yearly chart may fail to expand
the smart range. In this case the RSML will not change for a
year or more. This is a static SML or SSML.
A static smart median line that remains in place for more
than a year is a very powerful SML. SSML, RSML, SML
and DSML are essential trading tools for an excellent
Successful market watch consist of paying attention to
the seven market's leaders. This about the heart of the
trading triangle or the top down market analysis. When
the seven market leaders are bearish, one must give
priority to bearish trades and vice versa.
Below are listed the seven market's leaders.
1/ Google (GOOG)
2/ Apple (AAPL)
3/ International Business Machine (IBM)
4/ MacDonald (MCD)
5/ Caterpillar (CAT)
6/ Exxon Mobil (XOM)
7/ Boeing (BA)
The most influential market's leaders are Google and Apple.
They are the leaders for Nasdaq 100.
IBM, MCD, CAT, XOM and BA are leaders in Dow 30.