Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders

Learn How To Day And Swing Trade Using Stochastic, MACD, Bollinger Bands Like A Pro

The most misunderstood market principle is the zero bulls and bears principle.
Quite often, many attribute bullish price-actions to bulls and bearish ones to bears.
People believe that bulls do not sell or bearish market participants do not buy.
If Dow Jones rises 300 pips after bearish move, most will say that the bulls are back 

and they have kicked out the bears.
On the other hand, if NASDAQ 100 index falls fifty pips after a bullish move, everyone 

will be saying Oh yes the bears have caused it.  However, the reality is far from that. 

The truth is that when a financial instrument rises and reaches the ultimate target, 

bullish traders take profit.  Now how do bullish traders take profit?  Well, they sell to 

close their bullish position.  By doing so, they cause the price to drop fast.
Usually, the first leg or segment of a corrective wave in an uptrend is created by the 

bulls.  In that instance bulls become bears for a while.

Similarly, bearish traders create the first section of a rally or corrective wave in a 

downtrend.  Those bearish traders who close their bearish positions at a price target 

are buying.  Remember that a bearish trader must buy to close a bearish position.


In theory, one can say that 70% of the first leg of a corrective wave is created by the 

dominant market participants of the most recent motive, impulse wave or trend. 

The zero bulls and bears principle states that both bulls and bears can sell or buy.
It is a misconception to think that bears are only responsible for bearish price-actions 

while bulls are purely bullish.

In fact when the long term bullish investors that buy and hold are voluntarily divesting, 

the price can continue to decline for many months. 
So in a nutshell, that is the zero bulls and bears financial markets principle. 
Obviously, there are many implications to that principle that I do not want to discuss 

today. 

Truly, there are no market participants that purely bullish or bearish.  They are effectively 

bullish and bearish.  That clear understanding of the zero bulls and bears market principle 

will help one understand what is going on in this messy market.

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No financial instruments go up or down without a specific price target.  There is an ultimate 
and midpoint targets.  This is the principle of double targets.
The specific target is the ultimate price target.  However, professional traders do partially take 
profit at the midpoint target.

Suppose a financial instrument is headed to 100 dollars price target from 40 dollars.
The ultimate target is 100 but 70 dollars will be the midpoint target.
What usually happens is that a professional trader may open four trades at the start.  Then 
he or she will close two at the midpoint target and carry on with the rest up to the ultimate 
target.

Though, the price seems like be heading to an unknown target, there is always ultimate and 
midpoint price target.

When a technical trader finally grasps the importance of the double price targets, he or she 
will begin to pinpoint excellent trading opportunities including the convergent trading signals.  
Really, to be blunt, a technical trader who is trading without knowing where are the targets is 
trading blindly.

Note that the price does not have to hit any of those target by all means.  Nevertheless, it often 
hits them.  Sometimes, the price can hit the midpoint target without hitting the ultimate one.  
On some occasions, it may even exceed the ultimate target. If that is the case, one will resort 
to the market geometry to set new targets above the targets.

In fact the market principle of double targets is true on every time frame.
For example, one may set the two targets on the 5M chart but one can do the same on 2H
daily and monthly chart.

So there you have it, the market principle of double price targets.  It is simple but it helps 
to navigate the price action.
Ask the questions:
Where are we now?
Where are we headed?
With those questions, you will start seeing clearly.

I hope this article has been useful to you.
If that is the case, feel free to share it on the social media.