Question of the Week: 1/14/2009
From years of teaching classes and interacting with wave analysts, what common mistakes do most make?
This is an easy one; by far, the most common mistake made by wave analysts (especially of the orthodox variety) is that of starting a trend from the highest or lowest price on a chart. When applying NEoWave technology, it is rare a trend begin at the highest-high or lowest-low of a market. Understanding and incorporating just this one concept into your wave analysis will substantially improve the reliability and longevity of your wave counts over time and your ability to predict future price action.
How do you determine where to begin your analysis? New trends always begin with moves larger and faster than recent moves in the same direction. If you mark a high or low as the start of a new trend, but the move afterward is slower than the previous move in the same direction, you are starting your count from the wrong place.
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