Education & Information
Major Trends
Three Major Long-Term Trends
Often times investors new to the point & figure methodology miss the forest for the trees. They tend to get too caught up in the latest buy or sell signal on the point & figure chart and don’t pay enough attention to the major trend in force on the stock. Many of the buy and sell signals should be treated differently depending on the major trend. A buy signal while demand is controlling the major trend in a stock should be acted upon differently than when supply is controlling the major trend in a stock. We would be more likely to act upon a buy signal while demand is in control and would usually avoid buy signals while supply is in control. Most buy signals that occur while supply is in control of the main trend will be weak and lack any follow through on the chart. Buy signals given while the main trend is a balance pattern are also treated differently.