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Document

History
Change

Revision

Date
222014
August
252014
June
292014
May
202014
May
Summary

Changes
of
Page

Plessis:
Du
Jeremy
V.
for
material
reading
on
(3-5)
numbers
chapter
the
Corrected
17.
The

Figure
and
Point
to
Guide
Definitive
Page

Reading
I
CFTe
Required
(IFTA
Techniques
Figure
and
Point
D:
Appendix
Added
87.
Material)

Page

Appendices)
(see
material
reading
IFTA
additional
Required
#3:
Updated
17.

Page
18.
The
Analysis:
Technical
Dahlquist:
R.
Julie
Kirkpatrick,
D.
Charles
XI.
to
Added
Complete

and
Patterns
Temporal
9.
Chapter
Technicians:
Markets
Financial
for
Resource
Cycles

Cycles.
19.
Chapter
and
Page

21.
Item
Topics
of
Outline
Updated
10.
Page
VI.
Added
17.
MFTA:
Higashino,
(IFTA
E)
(Appendix
ICHIMOKU
on
Yukitoshi
Primer
Required

Material)
Reading
II
CFTe
Page

Ichimoku
the
with
Success
Trading
Charts:
Cloud
Linton:
David
XII.
Moved
18.
Page
17./
Technique
[Hardcover]
17)
(Page
Material
Readiing
II
CFTe
Required
IFTA
from
to
Recommended
(Additional)
18)
(Page
Material
Reading
II
CFTe
Page
E:
Appendix
Added
95.
MFTA:
Higashino,
(IFTA
)
ICHIMOKU
on
VI.
Yukitoshi
Primer
Required

Material)
Reading
II
CFTe
112014
March
Page
46:
Material)
Reading
I
CFTe
Required
(IFTA
Analysis
Breadth
B:
Appendix
Added:

Page

I
CFTe
Required
(IFTA
(EWP)
Principle
Wave
Elliott
The
A:
Appendix
Added:
20.
Reading

Material)

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Outline

Topics
of

1
HISTORY
ANALYSIS........................................................................
TECHNICAL
OF
.....................................3

2
PHILOSOPHY
MARKETS ........................................................................
AND
ANALYSIS
TECHNICAL
OF
...3

3
CHART
CONSTRUCTION ...................................................................
............................................................3

4
DOW
THEORY..........................................................................
......................................................................3

5
CONCEPTS
TREND ..........................................................................
OF
.........................................................4

6
CLASSICAL
PATTERNS........................................................................
CHART
BAR
......................................4

7
SHORT
PATTERNS .......................................................................
PRICE
TERM
............................................5

8
POINT
CHARTING .......................................................................
FIGURES
AND
...........................................5

9
CANDLE
CHARTING .......................................................................
STICK
.....................................................6

10
ICHIMOKU
CHARTS..........................................................................
.............................................................6

11
OTHER
METHODS ........................................................................
CHARTING
..............................................6

12

MARKET
PROFILE.........................................................................
.................................................................6

13
ELLIOTT
THEORY .........................................................................
WAVE
......................................................7

14
BASIC
THEORY .........................................................................
GANN
OF
ELEMENTS
.................................7

15
BASIC
TECHNIQUES......................................................................
QUANTITATIVE
......................................7

16
MOVING
AVERAGES........................................................................
..............................................................8

17
OSCILLATORS
OPINION ........................................................................
CONTRARY
AND
...........................8

18
RELATIVE
STRENGTH .......................................................................
.............................................................8

19
TIME
CYCLES .........................................................................
........................................................................9

20
VOLUME
INDICATORS......................................................................
MARKET
STOCK
AND
........................9

21
OTHER
IDEAS ..........................................................................
TECHNICAL
................................................

10
22
TECHNICAL
SYSTEMS ........................................................................
.........................................................

10
23
ACADEMIC
TA .............................................................................
ON
FINDINGS
.........................................

10
24

SENTIMENT
OPINION.........................................................................
CONTRARY
AND
............................

10
25
BEHAVIORAL
PSYCHOLOGY .....................................................................
INVESTMENT
&
FINANCE
........

11
26
ETHICS .........................................................................
................................................................................
.11

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Outline

(continued)
Topics
of
1
History

Analysis
Technical
of

Early

Wykoff
Schabaker,
Dow,
days:

Major

Publications

2
Philosophy

Markets
and
Analysis
Technical
of

Technical

Forecasting
Fundamental
versus

Technical

Investing
and
Trading
to
Approach

What

identified?
they
are
how
and
trend
a
is

Supply

Demand
and

Assumptions

Analysis
Technical
of

Random

Scale
of
Proportion
Tails,
Fat
Theory,
Walk

Market

Future
the
of
Prediction
Efficiency,

Criticism

Analysis
Technical
of

Financial

Cycles
Business
the
and
Markets

3
Chart

Construction

Types

Figures
and
Point
Candle,
Bar,
Line,
Charts:
of

Construction

Charts
of

Arithmetic

Scale
Logarithmic
or

Volume,

Interest
Open

Time

Frame

4
Dow

Theory

Basic

Ideas

Closing

Lines
and
Prices

Primary

Trend
Minor
Secondary
Trend,

Concept

Confirmation
of

Importance

Volume
of

The

Defects
Theorys
Dow

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Outline

(continued)
Topics
of

5
Concepts

Trend
of

Definition

Trend
of

Directions

Trend
of

Support

Resistance
and

Trendlines

Channels
and

Major

Trendlines

Fan

Principles

Strength

trend
a
of

Percentage

Retracements

Consolidations

Corrections
and

Breakouts

Speed

Lines

Unconventional

Trendlines

Internal

Trendlines

Regression

How

trends
impact
psychology
does

6
Classical

Patterns
Chart
Bar

Basics

Psychology

Patterns
and

Reversal

Patterns
Continuation
and

Patterns

Volume
and

Patterns
Objectives
Price
and
moves
measured
/

Head

reversed)
(normal
Patterns
Shoulder
and

Double

Bottoms
and
Tops

Triple

Bottoms
and
Tops

Rounding

bottoms
and
tops

Saucers

Spikes
and

Triangles

descending)
ascending,
(symmetrical,

Diamond

Tops
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Outline

(continued)
Topics
of

Broadening

Formation

Flags

Pennants
and

Wedge

Formation

Rectangle

Formation

Gaps

7
Short

Patterns
Price
Term

Basics

construction
Pattern
and

Gaps

Spike

bar)
low
bar,
range
(wide

Dead

bounce
cat

Island

reversal

Reversal

Run
Days

Thrust

Days

Two-bar

patterns
three-bar
or


8
Point

Charting
Figures
and

Basics

Chart

Omitted
Volume
and
Time
Construction:

Box

Count

Box

Filter
Reversal
and
Size

Price

Tops
Triple
Tops,
Double
Breakouts,
Patterns:

Support

Resistance
and

Trendlines

Measuring

Objectives
Price
and
Techniques

Point

Strength
Relative
Figures
and

Point

Indicators
Technical
other
Figures
and

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Outline

(continued)
Topics
of
9
Candle

Charting
Stick

Basics

Chart

Construction

Bullish

...)
Harami
Patterns,
Engulfing
Hammer,
(i.e.
Patterns
Reversal

Bearish

...)
pattern
Cloud
Dark
Pattern,
Engulfing
Man,
Hanging
(i.e.
Patterns
Reversal

Bullish

...)
gap,
Tasuki
upside
Lines,
separating
(i.e.
Patters
Continuation

Bearish

...)
strike
line
three
line,
separating
(i.e.
Patterns
Continuation

Candle

Filters
and
Patterns

10
Ichimoku

Charts

Basics

Chart

Construction
Cloud
and

Turning

Line

Standard

Line

Span

Span

Lagging

Line

Interpretation

clouds
of

11
12
Other

the
in
included
are
Break
Line
Three
and
Charts
Renko
Charts,
(Kagai
Methods
Charting
CFTe

later.)
added
be
will
section
this
in
the
of
rest
The
section.
material
reading
II
Level

Equivolume

Swing

charts

Kagi

Charts

Renko

Charts

Three

Charts
Break
Line

Heikin

Charts
Ashi

Drummond

Geometry
Market

Profile

Basics,

graphics
and
Construction

Market

Principles
organizing
Profile
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Outline

(continued)
Topics
of

Range
day,
Development
and
Profile
Patterns:
Normal
Trend
neutral
non
trend
double

day
distribution

TPO

Point

Control
of

Value

Area

13
Elliott

Theory
Wave

Basics

History
and

Principles

Counting
Wave
of

Corrective

Waves

Rule

Alternation
of

Channelling

Wave

Fibonacci

Retracements
and
Ratios
Numbers,

Fibonacci

Targets
Time

14

Basic

later)
added
be
to
material
(reading
Theory
Gann
of
Elements

Basics

History
and

Gann

Lines
Fan

Fibonacci

lines
Gann
and
numbers

Gann

Method
Swing
Two-Day

15
Basic

later)
added
be
to
material
(reading
Techniques
Quantitative

Mean,

Skewness
Variance,

Frequency

Probability
and

Basic

Concepts
Series
Time

Random

Theory
Walk

Yield

Concepts
Math

Time

Concept
Present
/
Money
of
Value

Compounding

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exams
Outline

(continued)
Topics
of

Performance

Measurement

Test

procedures

16
Moving

Averages

Different

...)
Triangular
Geometric,
Exponential,
Weighted,
(Simple,
Averages
Moving
of
Types

Moving

Envelopes
Average

Moving

crossovers
Average

Bollinger

Bands

Bollinger

Bandwidth
and
Bands

Moving

Cycles
and
Averages

Estimating

Average
Moving
a
of
Length
the

Adaptive

Average
Moving

17
Oscillators

Opinion
Contrary
and

Principles

Oscillation
of

Oscillator

Trend
and
usage

Measuring

Momentum

Rate

Change
of

Double

Averages
Moving

Commodity

Index
Channel

Relative

Index
Strength

Stochastics

Williams

%R

Directional

Indicator
Movement

Parabolics

Moving

histogram)
and
(indicator
Convergence/Divergence
Average

18
Relative

Strength

Basics

Ratios,

Rankings,
Spreads,

Relative

Levy
Strength
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exams
Outline

(continued)
Topics
of

Comparative

Strength
Relative

Relative

Performance

How

Charts
Strength
Relative
Interpret
to

19
Time

Cycles

Basics

Cycle

Concept

Amplitude,

Synchronicity
Harmonicity,
Phase,
Length,

Detrending

Dominant

Cycles

Cycles

Trends
and

Left

Translation
Right
and

How

Cycles
Estimate
to

Seasonalities

Stock

Cycles
Market

Fourier

Analysis

Maximum

Analysis
Spectral
Entrophy

20
Volume

Indicators
Market
Stock
and

Measuring

Interest
Open
and
Volume

Volume

Patterns
Chart
and

Volume

Signals

OnVolume
Balance

Volume

Accumulator

Measuring

Breadth
Market

Comparing

Averages
Market

Advance-Decline

Divergence
and
Line

Different

frames
Time

McClellan

Oscillator

New

Lows
New
Versus
Highs

Upside

Volume
Downside
versus
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(continued)
Topics
of

Arms

Index

TRIN

TICK
and

Equivolume

Charting

21
Other

later)
added
be
to
material
(*reading
Ideas
technical

CoT

Filtering*
Data

Trend

indicators

Volatility

Indicators

Range

Indicators
Momentum
/

Cyclical

Indicators

Hurst

Exponent*

DeMark

systems
Pattern
fixed
=
Indicators

22
Technical

Systems

Construction

Typical

elements

Proper

testing

Evaluation

Optimisation

Typical

systems

23
Academic

TA
on
findings

Testing

procedures

Testing

objectives

Efficient

Hypotheses
Market

24
Sentiment

Opinion
Contrary
and

Principle

Opinion
contrarian
of

Crowd

Opinion
Contrary
of
Concept
the
and
Behaviour

Investor

readings
Sentiment

Investor

Numbers
Intelligence
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October,
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from
taken
exams
Outline

(continued)
Topics
of

Commitments

Report
Trades
of

Net

Positions
Traders

Open

Options
in
Interest

Put/Call

Ratios

Polls

Insiders

Investors

Group
and
Individual

Psychology

25
Behavioural

later)
added
be
to
material
(reading
psychology
Investment
&
Finance

Prospect

Theory

Typical

Effects
Behavioural

Single

Behaviour
Investors

26
Ethic

later)
added
be
to
material
(reading

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1
from
taken
exams
CFTe

I
Level
Reading

Material

CORE

MATERIAL:
READING

I.Robert
Edwards,
(2001-2008),
Edition
current)
(or
9th
Trends,
Stock
of
Analysis
Technical
John,
Magee,
and
D.
John

1-57444-292-9
ISBN
2001,
Illinois
Chicago
Inc.,
Magee

Chapters:

1.Technical
The
Investing
and
Trading
to
Approach
2.Charts
3.Dow
The
Theory
4.Dow
The
Practice
in
Theory
5.Dow
The
Defects
Theorys
6.Reversal
Important
Patterns
7.Reversal
Important
Continued

Patterns
8.Reversal
Important
Triangles
The

Patterns
9.Reversal
Important
Continued

Patterns
10.
Other
Phenomena
Reversal
11.
Consolidation
Formations
12.
Gaps
13.
Support
Resistance
and
14.
Trendlines
Channels
and
15.
Major
Trendlines
16.
Technical
Charts
Commodity
of
Analysis
17.
A
Comments
Concluding
Some
of
Summary
Advancements
Technology
Investment
in
17.2
18.

Problem
Tactical
The
Strategies
Investor
Long-Term
the
for
Tactics
and
18.1
20.

Point
View
Speculators
Want:
we
Stocks
of
Kind
The
20.1
Point
View
Investors
Long-Term
The
Want:
we
Stocks
of
Kind
23.
Choosing
Frenzies
Speculative
Sector
Internet
Stocks,
Tulip
Stocks:
High-Risk
Managing
and
24.
The
Stocks
Your
of
Moves
Probable
25.
Two
Questions
Touchy
27.
Stop
Orders
28.

Top?
What
-
Bottom
a
is
29.
Trendlines
Action
in
30.
Use
Resistance
and
Support
of
Last
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2014
October,
1
from
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exams
CFTe

(Continued)
I
Level
Reading

Material

33.
Tactical
Action
Chart
of
Review
34.
A
Methods
Tactical
of
Summation
Quick
36.
Automated
Average
Moving
The
Trendlines:
38.
Balanced
Diversified
and
39.
Trial
Error
and
40.
How
Trading
in
Use
to
Capital
Much
41.
Application
Practice
in
Capital
of
42.
Portfolio
Management
Risk
43.
Stick
Guns
Your
to

II.
Murphy,
NY,
York,
Finance,
Institute
York
New
Markets,
Financial
the
of
Analysis
Technical
J.:
John
1999,

0-7352-0066-1
ISBN

Chapters:

1.of
Philosophy
Analysis
Technical
2.Theory
Dow
3.Construction
Chart
4.Concepts
Basic
Trend
of
7.and
Volume
Interest
Open
14.
Time
Cycles
III.
Pring,
York,
New
Company,
Book
Hill
McGraw
Edition,
current)
(or
4th
Explained,
Analysis
Technical
J.:
Martin
NY,

0-07-138193-7
ISBN
2001,

Chapters:

2.Markets
Financial
Cycle
Business
the
and
4.Parameters
Typical
Trends
Intermediate
for
12.
Individual
II
Indicators
Momentum
16.
The
Strength
Relative
of
Concept
18.
Price:
Averages
Major
The
20.

Cycles
Longer-Term
Time:
22.
General
Principles
26.
Sentiment
Indicators

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October,
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from
taken
exams

CFTe

(Continued)
I
Level
Reading

Material

IV.
Le
Market
Futures
the
of
Analysis
Computer
to
Guide
Traders
Technical
David:
Lucas
Charles,
Beau

Chapters:

1.Building
System
2.Studies
Technical
4.Trading
Day

V.Steve:
Nison
Edition
Second
Techniques,
Charting
Candlestick

Chapters:

1.Introduction
2.historical
A
background
3.the
Constructing
lines
candlestick
4.patterns
Reversal
5.Stars
6.Reversal
More
Patterns
7.Patterns
Continuation
8.Magic
The
Doji
9.it
Putting
Together
all

VI.
Du
Figure
and
Point
to
Guide
Definitive
The
Jeremy:
Plessis

Chapters:

1.to
Introduction
Charts
Figure
and
Point
2.and
Characteristics
Construction
3.Point
Understanding
Charts
Figure
and
4.Price
Projecting
Targets
5.Point
Analysing
Charts
Figure
and
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October,
1
from
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exams
CFTe

(Continued)
I
Level
Reading

Material

Required

Appendices):
(see
material
reading
IFTA
additional

1.Wave
Elliott
A)
(Appendix
Theory
2.Indicators
Breadth
B)
(Appendix
3.Cycles
Time
the
on
questions
The
Note:
added.
be
to
material
reading
additional
C:
(Appendix
Analysis
exam
for
)
above.
listed
reading
recommended
J.
John
Murphy,
from
pulled
be
will
topic
this
4.and
Point
D)
(Appendix
Techniques
Figure

RECOMMEDED

READING:
(ADDITIONAL)

VII:
Elder,
Management
Money
Tactics,
Psychology,
Living,
a
for
Trading
Dr.:
Alexander

Chapters:

1.Psychology
Individual
2.Psychology
Mass
3.Chart
Classical
Analysis
4.Technical
Computerized
Analysis
5.Neglected
The
Essentials
6.Market
Stock
Indicators
7.Indicators
Psychological
10.
Risk
Management

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CFTe

II
Level
Reading

Material

Core

Readings

I.Edition
Trends,
Stock
of
Analysis
Technical
John,
Magee,
and
Robert
9th
Edwards,

II.

Explained
Analysis
Technical
Pring:
J.
Martin

Chapters:

1.Market
The
model
Cycle
2.Markets
Financial
Cycle
Business
the
and
16.

Strength
Relative
of
concept
The
18.

Averages
Major
The
Price:
19Group
Price:
Rotation
20.

Cycles
Longer-Term
Time:

III.
Le
Market
Futures
the
of
Analysis
Computer
to
Guide
Traders
Technical
David:
Lucas
Charles,
Beau

Chapters:

1.Building
System
2.Studies
Technical
4.Trading
Day

IV.
Steve
10,
Nov
Finance,
(Wiley
Revealed
Techniques
Charting
Japanese
New
Candlesticks:
Beyond
Nison:
1994)

Chapters:

2.Basics
The
3.Patterns
4.and
Candles
Picture
Technical
Overall
the
5.the
How
Averages
Moving
use
Japanese
6.Break
Three-Line
Charts
7.Charts
Renko
8.Charts
Kagi
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CFTe

(Continued)
II
Level
Reading

Material

V.Du
Jeremy
Figure
and
Point
to
Guide
Definitive
The
Plessis:

Chapters:

1.to
Introduction
Charts
Figure
and
Point
2.and
Characteristics
Construction
3.Point
Understanding
Charts
Figure
and
4.Price
Projecting
Targets
5.Point
Analysing
Charts
Figure
and

VI.
MFTA:
Higashino,
E)
(Appendix
ICHIMOKU
on
Yukitoshi
Primer

VII.
Hawkins:
B.
Steven
and
Steidlmayer
Peter
J.
Second
Profile.
Market
with
Trading
Markets.
On
SteidlMayer
Editon

Chapters:

6.Market
Understanding
Profile
7.Data
Liquidity
Time
@
Volume
and
information,
Floor
On
Bank,
8.Steidlmayer
The
Markets
of
Theory
9.Steidlmayer
The
Distribution
10.

You
The
11.

trade
a
of
Anatomy
12.

Trader
Successful
a
of
Profile
13.

Future
the
and
Technology,
Trading,

VIII.
Howard
Validation
and
Testing,
Design,
for
Methods
Practical
Systems,
Trading
Quantitative
Bandy:
B.

IX.
Brian
Cycles
Past
from
Trends
Future
Millard:

Chapters:

3.Prices
How
(I)
Move
4.Prices
How
(II)
Move
6.and
Cycles
Market
the
8.of
Properties
Averages
Moving
9.as
Averages
Trends
for
Proxies
10.

(I)
Points
Turning
Trend
11.

(II)
Points
Turning
Trend
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12.

(III)
Points
Turning
Trend
13.

of
Sum
and
Cycles
14.

Together
all
it
Bringing
CFTe

(Continued)
II
Level
Reading

Material

X.Frost,
A.J.
Behavior
Market
To
Key
Principle:
Wave
Elliott
Prechter:
R.
Robert

Chapters:

1.Broad
The
Concept
2.of
Guidelines
Formation
Wave
the
3.and
Historical
Principle
Wave
the
of
Background
Mathematical
4.Analysis
Ratio
Sequence.
Time
Fibonacci
and

XI.

Markets
Financial
for
Resource
Complete
The
Analysis:
Technical
Dahlquist:
R.
Julie
Kirkpatrick,
D.
Charles
Technicians

Chapters:

3.of
History
Analysis
Technical
4.Technical
The
Controversy
Analysis
5.overview
An
Markets
of
7.Sentiment
8.Market
Measuring
Strength
9.Patterns
Temporal
Cycles
and
10.
Flow
Funds
of
13.

Retracements
and
Stops,
Breakouts,
18.

Confirmation
19.

Cycles
21.

Investing
Trading
Issues:
and
Markets
of
Selection
22.

Management
and
Testing
System

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Material

RECOMMEDED

READING:
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XII.

[Hardcover]
Technique
Ichimoku
the
with
Success
Trading
Charts:
Cloud
Linton:
David

Chapters:

8Chart
.
Construction
Cloud
9.Cloud
Interpreting
Charts
10.
Multiple
Analysis
Frame
Time
11.
Japanese
Techniques
Patterns
12.
Clouds
techniques
other
with
Charts
13.
Ichimoku
techniques
indicator
14.
Back-testing
Strategies
Trading
Cloud
and
15.
Cloud
analysis
Breadth
Market
16.
Conclusion

Notice

Quantitative
on:
the
for
material
reading
additional
supply
will
IFTA
Candidates:
II
CFTe
to
Analysis,

applicable),
(if
above
highlighted
material
reading
with
along
material,
This
Finance.
Behavioral
and
will

2014.
June
30
by
Appendices
the
in
posted
be
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exams

Appendix

The

(EWP)
Principle
Wave
Elliott
(IFTA

Material)
Reading
I
CFTe
Required

Mohamed

MFTA
CFTe,
ElSaiid,
Egyptian

(ESTA)
Analysts
Technical
of
Society

Introduction

In essential
chapter,
Elliott
Wave
Principle
is
introduced
to
the
candidate.
The
general
form
and
this
concepts
the
of
Elliott
Wave
structureand
role,
well
as
psychology
and
characteristics
underlying
theory.

and
Theory
Dow
with
Principle
Wave
Elliott
of
relationship
explains
chapter
the
Additionally,
classical

analysis.
technical
in
approach

The

help
to
effort
an
organizers,
visual
various
offering
format,
guide
study
in
designed
partially
is
chapter
the

of
comprehension
increasing
ultimately
and
material
in
offered
concepts
related
the
connect
reader
basic

EWP.
the
of
principles

Part

tenants
basic
and
background
historical
Principle;
Wave
Elliott
The
One:

The
by
Principle
(EWP)
or
Elliott
Wave
Theory
(EWT)
ais
technical
analysis
approach
developed
Ralph

action
explain
or
describe
to
intended
primarily
was
that
1900s
early
the
in
Elliott)
(R.N.
Elliott
Nelson
ofmarket

(DJI).
Index
Jones
Dow
the
namely;
index,

Prior
aand
to
his
works
findings
on
the
EWP,
R.
N.
Elliott
was
an
accountant
working
for
railways
restaurant.

in
interested
became
he
illness,
severe
a
from
recuperating
while
1930sand
early
the
During
Dow
interest.
Theory.
The
various
development
of
market
phases
as
viewed
via
Dow
Theory
piqued
his
Specifically,

trends.
market
observed
of
time-frames
the
categorizing
in
interested
became
he

Through
specific
his
meticulous
research,
R.
N.
Elliott
measured
movements
in
the
DJI
and
identified
relationships

varied
waves
relations
The
waves.
as
termed
later
movements
these
between
from
Elliott
size
time-related
aone,
structure
and
role-related
one.
With
respect
to
wave-role,
R.
N.
contended

and
direction,
trend
main
the
in
move
waves
waves;
of
types
two
were
there
that
move

developed
findings
and
observations
his
organized
Elliott
N.
R.
direction.
trend
main
the
against
EWP.

was
This
1938.
in
Principle
Wave
The
titled
publication
a
through
EWP
the
introduced
initially
Elliott
R.N.
followed

death
his
before
just
1946,
in
Universe
the
of
Secret
The
Laws:
Natures
book;
detailed
more
a
by
1948.

Over

promote
to
continued
EWP
of
practitioners
pioneering
and
followers
several
death,
his
since
years
the
the
Of
wave
principle
by
offering
publications
newsletters
to
investors
and
the
financial
community.
those
was
followers
were,
Charles
Collins,
publisher
of
the
book
"Wave
Principle",
Hamilton
Bolton,
who
accredited

R.
Robert
Frost
A.J.
finally
and
1900s,
mid
in
readership
wide
a
to
EWP
the
introducing
for
Prechter

practitioners
EW
many
by
regarded
is
which
book
a
1978;
in
Principle
Wave
Elliott
co-authored
who
tothe
be
date.
to
EWP
of
validation
and
description
available
best

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exams
The

Principle
Wave
Elliott
the
of
tenants
basic
and
form
general

The

Pattern
Wave
Five
Elliott

3
1,
(labeled
these
Three
pattern.
specific
a
waves
five
of
form
the
take
patterns
Wave
and
two
5),
cause
development
the
overall
directional
movement
of
prices.
They
are
separated
by
interruptions
is
against
trend
direction
(labeled
2
and
4)
which,
in
turn,
cause
the
fluctuation
that
naturally

of
direction
main
describe
5
and
3
1,
waves
words,
other
In
action.
price
the
in
observed
move,
the
while
two
and
four
are
seen
as
pauses.
Each
of
these
five
waves
aplay
critical
role
in
construction

movement.
description
overall
and
waves
the
of

Figure

sequence
Pattern
EW
wave
five
basic
the
1:
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exams
The

Cycle
EW
Complete
The

degree
larger
wave
single
a
completes
pattern
five-wave
of
progression
the
that
contends
EWP
which

to
develops
pattern
wave
three
a
progression,
this
Following
move.
directional
the
builds
ultimately
partially

and
progression
the
to
interruption
an
as
act
waves
three
These
move.
directional
this
counteract
complete

waves.
eight
consisting
cycle,
EW
single
a
of
formation
the
This

modes
These
modes.
or
structures
distinct
fundamentally
two
of
consists
cycle,
EW
complete
idealized
are
motive
referred
to
as
mode
and
corrective
mode.
In
this
idealized
cycle,
the
(five-wave)
modes
(three-wave)
are
always
denoted
by
numbers
(1,
2,
3,
4
and
5).
Meanwhile,
the
corrective

later
be
will
wave
of
concept
The
C).
B,
(A,
letters
the
by
denoted
always
are
modes
discussed

three.
part
details
in

Figure

cycle
EW
wave
eight
idealized
complete
the
2:
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Wave

degrees
Initially,

ripples
small
as
from
ranged
They
waves.
of
degrees
different
nine
recognized
Elliott
R.N.
onhourly
an
him
available
was
that
data
from
existed
assume
could
he
degree
wave
largest
the
to
chart
attime.

and
Frost
A.J.
infinite,
is
directions
both
in
progression
degree
implies,
theory
the
as
Since,
Robert

the
than
degree
larger
were
three
which
of
degrees,
wave
additional
six
suggested
have
Prechter
R.
initial

for
accredited
been
have
Prechter
and
Frost
Both
degree.
lesser
of
were
three
remaining
the
while
nine,
standardizing

have
they
that,
to
addition
In
Elliott.
R.N.
by
added
initially
scheme,
labeling
original
the
suggested

range
to
respect
with
degrees
wave
various
the
of
framework
general-but-more-detailed
a
span

chart
time-frame
relevant
adequate
most
the
that
suggested
addition,
This
degree.
each
of
duration
or
for

it
application,
EWP
in
aspect
important
very
a
as
deemed
is
This
visibly.
appear
would
degree
wave
each
represents

a
counting
imagine
life;
practical
in
EWT
the
applying
when
practitioners
EW
for
grounds
common
wave

well
as
are,
wave
this
of
durations
maximum
and
minimum
the
what
knowing
without
degree
time-frame

degree.
wave
this
chart
use
to
charts

Table

EWP
the
of
waves
degree
nine-
initial
The
1:
Table

unique
a
following
degree
wave
each
with
degrees,
EW
nine
initial
of
nomenclature
the
depicts
1
labeling

time-frame
proposed
corresponding
the
well
as
durations
minimum
and
maximum
The
process.
chart

waves.
the
charting
in
aid
to
guidelines
as
offered
also
are
degree
wave
each
for
The

structure
(5-3)
overriding
the
behind
rationale
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exams
Itconsistently
is
of
form
the
takes
always
direction
either
progression
that
actions
price
all
in
observed
fluctuations

adds
EWP
move).
entire
of
part
as
direction
opposite
the
in
actions
are
there
that
(meaning
that

minimum
direction),
opposite
the
in
(action
fluctuation
allow
not
does
occurrence
one-wave
a
since
requirement

allow
not
do
directions
opposite
two
in
waves
Three
waves.
three
is
fluctuation
achieving
for
progress.

interrupting
(i.e.
other
the
over
direction
one
in
development
or
progress
net
a
achieve
to
Hence,
three

structure.
five-wave
a
least
at
contain
must
trend
main
the
waves),
Part

E-Waves
the
of
psychology
and
characteristics
personality:
Wave
Two:
Wave

market
behavior
and
psychology
crowd
of
aspect
the
on
focus
in-depth
an
offers
personality
participants.

action
market
the
of
understanding
our
enhances
that
framework
a
offer
to
attempts
EWP
The
and

analysis.
technical
of
approach
classical
the
in
discussed
and
introduced
initially
was
that
behavior
The

mass
reflection
part
integral
an
plays
sequence
Wave
Elliott
the
in
wave
each
of
personality
psychology

which
"signature"
or
mark
own
its
has
wave
each
that
assume
Analysts
EW
such,
As
embodies.
it
generally

why
and
how
understanding
Thus,
observation.
under
phase
that
of
psychology
the
reflects
waves

EWP.
of
application
the
to
key
is
develop
The

previously
cycle
EW
of
form
idealized
the
to
reference
in
are
described
be
will
which
characteristics
presented

2.
figure
in
Characteristics

1:
Wave(s)
of

Commonly,

period
bad,
generally
is
news
accompanied
1,
waves
of
(start)
bottom
the
during
often
depression
exhibits
the
occurrences
of
recession
(during
intermediate
wave
degrees),
or
even
and

degrees).
wave
large
(during
war

At look
point
and
given
that
input
information
on
the
current
economic
situation
does
not
this
good,

estimates.
earnings
their
lower
to
continue
analysts
fundamental

Quite
during
commonly,
waves
1
are
formed
aas
part
of
the
bottoming
phase
or
more
generally,
periods

2.
wave
in
movement
corrective
deeper
demonstrate
to
tend
thus,
and
disbelief
of

Wave
structured
1,
the
rebound
from
preceding
bear
trend,
is
constructive
and
aoffers
more
rebound
is
from
undervalued
price
levels.
This
move
often
adisplays
subtle
increase
in
volume
and
relatively

breadth.
market
by
supported

The
to
short
interest
level
peaks
as
majority
of
market
participants
believe
that
the
overall
trend
is
the
downside.
out.
get
and
sell
to
chance
last
a
as
rally
the
view
Investors

When
extreme
waves
1
rise
either
large
bases
formed
by
the
previous
correction,
or
from
compression.
is
They
appear
as
dynamic
dramatic,
and
the
result
that
only
moderate
retraced
seen

2.
wave
in
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exams
Characteristics

2:
Wave(s)
of

Waves

heavily
tend
They
prices.
of
move
directional
and
progress
the
interrupt
to
as
so
act
2
retrace

the
during
mostly
occur
themselves
they
since
especially,
1,
wave
beyond)
extend
not
(but
periods

phase.
market-up
the
to
prior
disbelief,
of

More

2
wave
of
(bottom)
end
the
during
worse
be
to
tend
fundamentals
and
news
not,
than
often
when

1.
wave
of
(bottom)
beginning
the
to
compared

Systematically,

more
once
proceeding
is
market
bear
the
that
convinced
are
investors
2,
wave
during
following

rally.
trend
counter
another
be
to
perceived
had
they
what
or
1,
wave
of
termination
the

Waves
aof
2
are
often
associated
with
downside
non-confirmations.
This
usually
takes
the
shape
weakening
by
downside
momentum
and
breadth.
Adding
to
this,
waves
2
are
often
accompanied
low

2
waves
for
uncommon
not
is
It
pressure.
selling
of
up
drying
a
indicating
volatility,
and
volume
tomore
take
1.
waves
preceding
their
to
compared
formation
in
time
Characteristics

3:
Wave(s)
of

Waves
are
strong
broad;
the
trend
at
this
point
is
unmistakable.
Waves
3
occur
and
confirmed

phase.
mark-up
as
highlight
approach
classic
what
of
start
the
during

Turnaround

confidence
investor
an
causing
arena,
financial
the
in
flow
to
begin
stories
fundamentals
re-build.

Waves
extended
3
usually
generate
the
greatest
volume
and
price
movement,
as
they
most
often
beyond

distance.
and
time
both
to
respect
with
limits,
normal
their

During
multi-continuation
waves
3,
successful
classical
pattern-breakouts
are
commonly
observed;
gaps,
sectors
volume
expansions,
exceptional
breadth
(since
almost
all
share
prices
and
market
participate),
which
well
as
major
Dow
Theory
trend
confirmations
and
runaway
price
movement,
create

degree.
wave
on
depending
market,
the
in
gains
large

Corrections

suffer
pull-backs
buying
on
bet
who
those
as
short-lived
and
weak
usually
are
3
waves
in
the

move.
the
missing
of
likelihood
Characteristics

4:
Wave(s)
of

In was
occurrence
wave
4
implies
that
best
part
of
the
growth
phase
which
principle,
evident

ended.
has
3
wave
in

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More

part
develop
They
interruption.
sideways
of
form
a
as
appear
4
waves
not,
than
often
the
public
building
aof
base
for
final
fifth
move.
In
part,
wave
4
is
seen
as
the
participation

Theory).
(Dow
approach
classical
the
by
termed
as
phase

Lagging

wave
of
strength
the
only
since
wave,
this
during
declining
begin
and
tops
their
build
stocks
3

in
deterioration
initial
This
participation.
upside
the
for
along
them
pulled
have
to
thought
is
market

during
weakness
of
signs
subtle
and
non-confirmations
divergences,
breadth
for
stage
the
sets
the

wave.
fifth
Characteristics

5:
Wave(s)
of

Specifically,

the
With
breadth.
of
terms
3
than
dynamic
less
always
are
5
waves
stocks,
in
exception

weaker
a
display
usually
they
three),
part
in
discussed
be
will
(which
extensions
wave
fifth
of
momentum

well.
as

Asgeneral
a
volumes.
3
wave
compared
when
less
be
to
tend
5
waves
in
volumes
feature,

During
emerges,
advancing
waves
5,
optimism
runs
extremely
high
as
further
public
participation
despite

corrective
prior
to
relative
improve
does
action
market
Nevertheless,
breadth.
of
narrowing
a
wave

rallies.

Commonly,
that
during
top
(end)
of
wave
5,
the
accompanied
news
is
positive,
implying
prosperity
the
and
peace
are
guaranteed
forever
as
arrogant
complacency
becomes
evident
in
financial

news.
financial
and
community
Characteristics

A:
Wave(s)
of

During

just
reaction
this
that
convinced
generally
is
world
investment
the
markets;
bear
of
waves
"A"
a valid
pullback
pursuant
next
leg
of
advance.
The
public
surges
to
buy
side
despite
the
first
technically

stocks.
individual
of
patterns
trend
in
cracks
damaging

The

directional
of
start
a
indicates
A
five-wave
A
follow.
that
for
tone
the
set
waves
"A"
ormode,
trending
follow.
likely
will
mode
sideways
or
flat
that
indicates
A
three-wave
a
while
Characteristics

B:
Wave(s)
of

"B"
oddlotter
waves
phonies.
They
are
sucker
plays,
bull
traps,
speculators
paradise,
orgies
of
mentality

both).
(or
complacency
institutional
dumb
of
expressions
or

They
list
narrow
of
advance
emotional
an
by
accompanied
often
are
evident
be
would
which
stocks,
of
through

indications.
momentum
and
TA-breadth
of
signs
non-confirming

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be
to
expected
always
almost
and
indices
market
all/broader
by
unconfirmed
often
are
waves
completely

C.
wave
following
the
by
retraced
Characteristics

C:
Wave(s)
of

"C"

are
they
that
sense
in
third
properties
and
characteristics
the
of
most
inherit
waves
persistent

broad.
and

Incase
the
waves:
"C"
bearish
of

oare
They
destruction.
their
in
devastating
usually
ois
There
cash.
except
hide
to
place
no
virtually
oThe
false
impression
that
the
bull
trend
is
back
on
track
which
was
held
throughout
its
preceding
panic
waves
A
B
tend
to
fade
away,
as
fear
and
occasionally
multiple
phases

over.
take
oultimately
Fundamentals
action.
market
the
of
response
in
collapse

Incase
the
waves:
"C"
bullish
of

oare
They
degrees.
larger
of
waves
in
returns
or
gains
sizable
render
often
and
constructive
ousually
They
stay.
to
back
is
trend
bull
the
that
indication
fake
a
give

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Part

Principle
Wave
Elliott
the
of
structure
and
Aspects
Three:

Figure

EWP
the
of
map
(structure)
Modal
3:

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The

time.
and
ratio
pattern,
namely;
aspects,
key
three
of
comprised
is
EWP

Pattern:

The
aspect
pattern
(or
structure)
is
regarded
as
most
important
one
of
the
three
aspects.
This
describes
aform
and
categorizes
various
structures
of
the
underlying
waves,
which
ultimately
add
up
to
larger

structure.
of
hierarchy

Ratio:

The
different
aspect
ratio
describes
relationship
between
lengths
the
waves
of
same
and/or
degrees.

Time:

The

and/or
same
E-cycles
and
E-waves
durations
between
relationship
the
describes
time
of
aspect
different

degrees.

Inchapter,
this
structure).
(or
pattern
of
aspect
the
on
exclusively
focus
will
we

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Wave

(role)
Function

According
of
to
EWP,
each
wave
ahas
role
or
function.
This
function
is
determined
only
by
the
relationship
that
this
to
the
of
one
larger
degree.
As
such,
awhen
wave
is
termed
as
actionary,
means
that
wave

this
Accordingly,
degree.
larger
one
wave
of
development
and
progression
the
for
responsible
is
wave
awhen
moves
same
direction
and
helps
in
building
the
wave
of
one
larger
degree.
Conversely,
wave

of
regression
and
interruption
the
for
responsible
wave
that
means
this
reactionary,
as
termed
is
the
and
direction
opposite
the
in
moves
this
Accordingly,
degree.
larger
one
of
wave
down
tears
partially
the

degree.
larger
one
wave
the
of
progress

Figure

function
Wave
4:
Wave

(structure)
Mode

Into
addition
of
types
fundamental
two
between
differentiated
and
identified
Elliott
R.N.
function,
wave
the
waves
wave
with
their
shape
or
structure,
which
he
referred
as
the
mode.
With
respect
to
structure
the
or
mode,
R.N.
Elliott
categorized
into
motive
waves
and
corrective
waves.
It
is
fundamental

EWP.
of
bone
back
the
shapes
that
two
those
between
distinction

Motive

waves

Definition:

Motive
always
waves
are
responsible
for
progress
and
development
of
the
overriding
trend.
They
must
exist

rules:
following
the
to
adhere
and
structure
five-wave
a
as

1.2
Wave
1.
wave
of
start
the
beyond
extend
not
does
2.4
Wave
3.
wave
of
start
the
beyond
extend
not
does
3.3
Wave
1.
wave
beyond
travels
always
4.3
Wave
5.
and
1,
waves
motive
of
shortest
the
never
is
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5.2
Waves
structure.
in
corrective
be
must
4
and

These
and
rules
define
structure
of
motive
waves
ensure
its
purpose--that
is
the
progress
development

trend.
overriding
the
of

Itunderstood

automatically
is
rules
above
of
one
adhere
to
failing
structure
any
that
EWP
the
from
identified

structure.
five-wave
of
form
the
takes
it
if
even
structure,
corrective
a
as
mode)
(in

Types

waves:
motive
of
characteristics
and

There
(or
are
two
different
types
of
motive
waves,
namely;
Impulses
Impulse
waves)
and
Diagonals
Diagonal

waves).

Impulses

Impulses

must
structures
These
structure.
five-wave
a
as
exist
always
that
waves
motive
of
types
are
adhere

exclusive
are
extra
following
that,
addition
In
waves.
motive
of
rules
primal
the
to
Impulses:

1.of
End
1.
end
with
overlap
not
does
4
wave
2.1,
Waves
structure.
in
motive
be
must
wave
impulse
an
of
5
and
3
3.(to
Extensions
once.
at
5
and
3
1,
waves;
three
all
in
exist
never
can
shortly)
discussed
be

Itworth
is
Impulses.
as
exist
only
can
3
waves
that
noting

Structural

impulses:
of
characteristics
modal
or
Extension:

Extensions

waves
impulse
elongation
or
stretch
extra
an
of
cause
the
primarily
as--and
defined
are
(with

abundance.
in
exist
subdivisions
stretch,
this
of
result
a
as
Naturally,
both).
or
length
time,
to
respect
Extensions

the
one
during
occur
generally
and
waves
impulse
of
characteristic
modal
common
very
a
are
three

develop.
they
as
5)
and
3,
(1,
waves
actionary

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Figure

5:
Types

markets
bear
and
bull
waves
impulse
in
extensions
of

Truncation:

Truncation

that
In
3.
end
the
exceed
to
fails
5
wave
which
in
impulses
of
characteristic
another
is
sense,

the
weakness
of
sign
a
as
perceived
generally
are
and
5,
waves
impulse
in
occur
only
truncations
market.
this
Truncations
imply
that
although
the
market
was
able
to
develop
ainto
5-wave
structure,
development

preceding
its
of
end
beyond
market
the
drive
to
momentum
enough
with
associated
not
was
wave

direction.
opposite
the
in
follow
to
wave
sharp
implies
generally
truncation
a
Moreover,
3.

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Figure

truncations
impulse
market
Bear
and
Bull
6:

Diagonals

Diagonals

the
to
adhere
must
Diagonals
structure.
five-wave
a
as
form
always
that
waves
motive
of
types
are
primal

middle
as
exist
never
can
waves
these
However,
waves.
motive
the
of
rules
(overriding)
waves

accepted
is
4
and
1
waves
between
overlap
an
impulses,
unlike
Moreover,
3.
wave
motive
i.e.
isas
considered
waves.
motive
types
such
of
characteristic
a
Diagonals

diverging
cases
common
less
in

or
lines,
converging
semi
falling)
(or
rising
two
as
identified
are
lines.

formation.
wedge
classical
a
resemble
always
will
pattern
EW
this
that
assume
to
not
important
is
it
Thus,
Despite

identical.
always
not
are
structures
their
psychology,
similar
almost
sharing

There

Diagonals.
Ending
and
Leading
namely;
diagonals,
of
types
two
are

Leading

Diagonals
Asname

a
of
development
and
build
the
initiate
that
waves
motive
as
appear
Diagonals
Leading
implies,
new

or
structure,
motive
five-wave
a
of
1
wave
as
only
appear
can
They
wave).
degree
larger
(a
trend
asA
wave
whereby
structures
five-wave
are
Diagonals
Leading
development.
corrective
Zigzag
ABC
an
of
waves

structure.
in
corrective
4
2
waves
while
waves,
motive
five
into
subdivided
are
5
and
3
1,
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Figure

Diagonals
Leading
diverging
and
Converging
7:

Ending

Diagonals
Asname

an
of
development
and
build
the
terminate
that
waves
motive
as
appear
Diagonals
Ending
implies,
existing

or
5
wave
motive
as
only
appear
can
Diagonal
Ending
An
wave).
degree
larger
(a
trend
wave

development.
corrective
ABC
an
of
C
Being

to
adhere
strictly
Diagonals
Ending
waves
five
modes),
(or
structures
motive
the
of
member
a
the

are
waves
five
these
some
subdivisions
However,
waves.
motive
the
of
rules
(overriding)
primal
somewhat

Ending
five
wave
Each
structures.
motive
types
other
all
of
subdivisions
the
from
different
Diagonal

its
all
words,
other
In
5).
and
3
1,
including
(i.e.
three
into
subdivided
is
waves
subdivisions

structure.
in
corrective
are
Itworth
is
actionary
structure
corrective
are
Diagonals
Ending
in
5
and
3
1,
waves
that
noting
function

function
reactionary
structure
in
corrective
both
are
4
and
2
waves
Meanwhile,
role).
(or
(or

role).

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Figure

Diagonals
Ending
diverging
and
Converging
8:

Corrective

waves

Definition:

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Corrective
sense,
waves
appear
in--and
are
exclusively
responsible
for
all
counter
trend
interruptions.
In
that
corrective

cases)
special
(in
exist
also
may
they
However,
waves.
reactionary
as
function
primarily
structures
actionary
are
(for
example:
during
1,
3
and
5
of
an
ending
diagonal).
Corrective
waves
primarily
fundamental
structured
in
the
form
of
three
waves
aor
more
complex
variation
thereof.
The
difference

cardinal
of
more
or
one
break
always
will
latter
the
that
is
waves
corrective
and
motive
between
rules

corrective.
is
rules
wave
breaks
that
structure
five-wave
any
Thus,
wave.
motive
the
of

The

interruptions
trend
counter
all
for
driver
sole
the
being

that
is
corrective
called
are
they
why
to
as
reason
corrective

any
by
achieved
progress
the
of
"correction,"
or
retracement,
partial
a
only
accomplish
waves
preceding

movements
that
is
retracement,
partial
only
cause
to
tend
waves
corrective
why
for
As
wave.
motive
against

force
overriding
the
to
due
caused
primarily
is
This
struggle.
a
as
appear
degree
larger
one
of
trends
the

A
structures.
motive
as
develop
fully
to
movements
counter
prevents
which
trend
degree
larger
byproduct

their
than
varied
more
and
identifiable
less
be
to
tend
structures
corrective
that
is
situation
this
of
motive

counterparts.

Types

waves:
corrective
of
characteristics
and

Corrective
manifested
appear
in
two
types,
sharp
and
sideways.
Sharp
corrective
structures
are
through

Triangles.
and
Flats
through
represented
are
structures
sideways
while,
Zigzags,

Sharp

structures:
corrective

Zigzags

Zigzags

structure.
three-wave
a
as
exist
They
pattern.
corrective
EW
of
form
common
most
the
represent
The
terminate
three
waves
are
denoted
by
the
letters
A,
and
C
respectively.
Wave
B
will
never
beyond

A.
end
beyond
travel
will
C
and
A
wave
of
start
the

Inthe
zigzags,
(either
degree
larger
one
build
helps
it
because
actionary
is
A
wave
of
function
wave
is
2
4).
Meanwhile
its
structure
motive
(can
either
an
impulse
aor
leading
diagonal),
thus
it
subdivided
aas
into
five
waves
and
adheres
to
motive
wave
rules.
Wave,
B
on
the
other
hand
acts
reactionary

4),
or
2
(either
degree
larger
one
wave
of
progress
the
interrupts
it
since
wave,
while

larger
one
of
the
build
helps
it
because
actionary

C
wave
Finally,
corrective.
is
structure
its
degree
ending
(either
wave
2
4).
Meanwhile
its
structure
is
motive
(can
either
impulse
or
an
diagonal),
are
thus
it
is
subdivided
into
five
waves
and
adheres
to
the
motive
wave
rules.
As
such,
Zigzags
commonly

5-3-5s.
as
practitioners
EW
by
known

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Figure

Zigzags
market
bear
and
Bull
9:

Sideways

structures:
corrective

Insideways
general,
well
as
degree
larger
one
of
trend
stronger
a
to
due
occur
generally
structures
corrective
aslack
a
structures,
corrective
sideways
types
two
are
There
Zigzags.
to
relative
pressure,
countertrend
of
namely;

Triangles.
and
Flats

Flats

Flats
arepresent
another
form
of
EW
corrective
pattern,
where
as
the
name
implies
they
sideways
three-
transition
the
overriding
direction
(unlike
Zigzags).
Similar
to
Zigzags,
they
also
exist
aas
wave
offers
structure,
where
each
wave
is
labeled
by
the
letters
A,
B
and
C
respectively.
However,
Flats
avariation

structure
five
a
as
develop
to
momentum
enough
hold
not
does
A
wave
that
in
Zigzags
from
aswave
does
result,
As
waves.
three
into
develops
structure
flat
Instead,
Zigzag.
a
of
A
B
does
aof
Flat
structure
not
suffer
the
same
pressure
which
causes
it
to
partially
retrace
wave
A
as
wave

corrective,
and
actionary
both
is
structure
Flat
A
wave
that
noting
worth
Its
Zigzag.
a
of
B
B
commonly
both
reactionary
corrective,
wave
C
is
actionary
and
motive.
As
such,
Flats
are
known

3-3-5s.
as

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Types

Flats:
of
characteristics
and

Regular

Flats

InFlats,
regular
C
while,
A,
preceding
its
of
start
the
near
or
at
terminates
B
wave
at,

B.
wave
beyond
faintly
or
near

Expanded

Flats

Expanded
B
Flats
are
regarded
as
the
most
commonly
recurring
type
of
Flat
formation.
In
this
type,
wave
terminates

terminates
C
while,
A,
wave
preceding
its
of
start
the
beyond
B

A).
wave
of
end
the
(i.e.
Running

Flats

Running
Flat,
Flats
are
rare
when
compared
to
the
former
two
Flat
types
already
discussed.
In
this
running
wave

However,
flats).
expanded
to
(similar
A
wave
preceding
its
of
start
the
beyond
terminates
B
C
overriding
fails
to
match
length
wave
B.
It
is
implied
by
this
formation
that
the
momentum
of
trend

direction.
its
in
tilt
pattern
corrective
forces
it
that
extent
the
to
strong
significantly
is

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types
Flat
market
bear
and
Bull
10:

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Triangles

EWare
Triangles
in
corrections,
Flat
EW
to
similar
They
structures.
corrective
sideways
of
type
another
yet
the
synonymous
sense
that
they
areflect
form
temporary
balance
of
forces
(buyers
and
sellers).
This
is
also
to the
interpretations
classical
approach
of
sideway
corrections.
However,
unlike
Triangles
in
classical
degree
approach,
EW
Triangles
always
act
as
continuation
patterns
(or
wave
degrees)
to
the
larger
trend

wave.
or
EWconsist
Triangles
threes).
(five
waves
three
into
subdivides
wave
each
which
in
waves,
overlapping
5
of
Since

respectively.
E)
and
D,
C,
B,
(A,
follows:
as
letters
in
labeled
corrective,
are
they
EWcan
Triangles
of
types
three
are
There
Triangles.
Expanding
and
Contracting
into;
categorized
be
Contracting

Expanding
of
type
one
only
is
there
while
Descending,
and
Ascending
Symmetrical,
Triangles;
Triangles.

they
general,
In
Triangles.
Symmetrical
Reverse
as
to
referred
also
are
Triangles
Expanding
corrective

trend.
major
of
direction
in
move
final
the
precede
to
tend
that
patterns
Contracting

Triangles
InTriangles:
Contracting
1.
2.
3.
Wave

A.
wave
of
end
the
beyond
moves
never
C
Wave

B.
wave
of
end
the
beyond
moves
never
D
Wave

C.
wave
of
end
the
beyond
moves
never
E
Expanding

Triangles
InTriangles:
Expanding
1.
2.
3.
Wave

A.
wave
of
end
the
beyond
move
always
C
Wave

B.
wave
of
end
the
beyond
move
always
D
Wave

C.
wave
of
end
the
beyond
move
always
E

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Figure

types
Triangle
EW
market
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and
Bull
11:

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Running

Triangles:
Running
of
aare
very
common
case
contracting
EW
Triangles
in
which
wave
B
exceeds
the
start
wave

A.

Figure
11:

types
Triangle
Running
EW
market
bear
and
Bull

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One

that
EWP
from
implied
is
It
mode:
and
function
wave
of
subject
the
to
regards
with
point
final
motive

be
also
can
but
reactionary,
mostly
corrective
Whereas,
actionary.
always
are
structures
actionary

function.
or
role
in

Part

approach
classical
and
principle
Dow
to
EWP
the
Comparing
Four:
(relationships

similarities)
and
According

(primary),
major
trend-frames;
main
three
are
there
tenants,
Theorys
Dow
the
to
intermediate

primary
on
specifically
more
focuses
Theory
Dow
The
trends.
minor
the
and
theory

public
phase,
accumulation
the
as
termed
are
They
phases.
three
have
trends
or
waves
that
states
participation

initially
by
concept
this
on
expanded
elaborated
EWP
The
phase.
distribution
the
and
phase
introducing

presented
previously
as
durations
of
range
specified
a
with
each
degrees,
(wave)
trend
various
nine
inI.
part
Followers

to
managed
approach
classical
developing
for
accredited
later
were
whom
Theory
Dow
the
of
affirm,

idealized
an
that
suggested
Some
trend.
market
the
of
phases
three
Dows
expand
and
complement
form

tranche
bull
the
constitute
which
Three
phases.
six
involve
likely
will
succession
bull/bear
complete
a
of
ofsuccession,

participation
public
mark-up
accumulation
the
as
recognized
are
and
phases

are
and
succession
of
tranche
bear
the
up
make
would
phases
three
addition,
In
respectively.
termed

of
Advocates
respectively.
phases
selling
discouraged
and
panic
distribution,
the
as
classic

market
constitute
(which
phases
accumulation
and
selling
discouraged
the
that
added
approach
bottoms)

wrong
on
caught
is
psychology
crowd
irrational
the
which
in
disbelief
of
period
a
during
occur
side

period
a
during
occur
phases
panic
driven-major
fear
and
mark-up
Meanwhile,
market.
the
of
belief

finally,
And
market.
of
side
right
on
caught
is
psychology
crowd
irrational
the
which
in
public

euphoria
of
period
a
during
occur
tops)
market
constitute
(which
phases
distribution
and
participation
and

of
side
wrong
on
caught
again
is
psychology
crowd
irrational
the
which
in
optimism
extreme
market.

When

that
find
we
EWP,
approach
classic
and
Dow
through
offered
concepts
the
relate
to
trying
classic

EWPs
the
to
compatible
quite
seems
bear
and
phases
market
bull
three
approachs
idea

decline.
bear
three
by
followed
advance
market
bull
wave
five
a
of
Finally,

confirmations
indices
breadth
volume,
to
reference
made
EWP
and
Theory
Dow
the
both
through

breadth
volume
that
explained
Theory
Dow
The
respectively.
guidelines
and
tenants
their
act

this
on
emphasized
further
EWP
While
trend.
overriding
of
sustainability
the
to
confirmation
a
as
matter

motive
advancing
during
confirmations
indices
breadth
volume,
of
importance
the
explained
and
waves.

divergences
with
associated
likely
more
be
to
waves
ending
and
corrective
characterizing
While,
non-confirmations

indices.
market
other
and
breadth
volume,
from
Asthere
such
some
as
regarded
be
can
and
Theory
Dow
by
influenced
largely
was
EWP
the
that
doubt
little
is
form

as
regarded
be
may
and
Theory
much
validates
EWP
which
in
Theory,
Dow
the
to
extension
of
anthereof.
extension
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Figure

Approach
Dow/Classic
EWP
the
Between
Similarities
and
Relationships
12:
Figure

bull/bear
of
phases
six
idealized
the
over
superimposed
cycle
EW
complete
a
depicts
12
succession

similar
share
5
through
1
sequence
wave
observed,
As
approach.
Dow/classic
the
of
characteristics,

participation
public
mark-up
accumulation,
the
within
well
quite
fit
to
seem
and
psychology
phases,

phases.
three
following
the
to
compared
when
C
through
A
sequence
wave
does
as
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Part

Conclusion
and
Summary
Five:
Unlike

that
assumption
under
functions
which
analysis
technical
in
approach
Figure
and
Point
the
market

noise.
contain
not
does
market
that
implies
indirectly
EWP
the
noise,
unnecessary
contains
action
The

structured
predefined
a
to
adheres
frames
time
of
smallest
the
at
even

action
market
that
contends
EWP
framework

larger
a
build
ultimately
to
collaborate
collectively
patters
These
nature.
fractal
is
that
patterns
of
degree

on.
so
and
structure/trend
Moreover,

wave,
each
characteristics
and
psychology
crowd
mood,
social
of
interpretations
the
through
EWP

understanding
to
regards
with
Theory
Dow
the
of
explanation
detailed
more
and
extended
an
offers
market

action.
and
behavior
Onother

general
to
variations
many
and
complexity
its
for
criticized
been
has
EWT
the
hand,
(idealized)

various
scenarios
multiple
offer
to
theory
causes
times
at

that
issue
The
theory.
the
of
form
junctures

an
implementing
support
to
fails
sometimes
thus,
and
life,
practical
in
progresses
wave
the
as
investment-decision

findings.
its
on
based
process
Inbook,
his
wrote:
Aronson
David
Analysis,
Technical
Evidence-Based
The

that
one
compelling
and
story,
but
theory,
legitimate
a
not
is
practiced,
popularly
as
Principle,
Wave
Elliott
istold
eloquently
seemingly
the
has
EWP
because
persuasive
especially
is
account
The
Prechter.
Robert
by
remarkable

is
this
contend
I
fluctuations.
minute
most
its
down
history
market
of
segment
any
fit
to
ability
made
possible
waves
nested
of
number
large
a
postulate
to
ability
the
and
rules
defined
loosely
method s
by
varying

pre-Copernican
allowed
that
flexibility
and
freedom
same
analyst
Elliott
the
gives
This
magnitude.
astronomers

Earth-centered
an
of
theory
underlying
their
though
even
movements
planet
observed
all
explain
to
universe

wrong.
was
Nevertheless,

TA
approaches
and
tools
other
with
conjunction
in
analysis
EW
the
of
implementation
proper
generally

the
aid
can
TA
approaches
and
tools
other
While
action.
market
of
understanding
better
a
offers
EWP

EWP.
of
limitations
reducing
thus
scenarios,
expected
the
down
narrowing
in
Quoting

Murphy:
J.
John
The

forecasting.
market
of
puzzle
the
answer
partial
a
as
EWT
view
to
is
key
Reference

material
Inentirety,
its
exclusive
to
tribute
and
reproduction
simplified
a
is
chapter
this
in
expressed
material
the
pioneering

other
Murphy
thoughts
combined
EWP
on
Prechter
and
Frost
the
of
works
authors

subject.
the
on
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Appendix

Breadth

Analysis
(IFTA

Material)
Reading
I
CFTe
Required

Tamar

CETA
CFTe,
Gamal,
Egyptian

(ESTA)
Analysts
Technical
of
Society

Introduction

What

market)?
(stock
market
a
is
Amarket

trade.
to
exist
sellers
and
buyers
both
where
place
a
is
Similar

listed
of
kinds
all
trade
sellers
and
buyers
both
where
place
is
market
stock
a
market,
any
to
securities.

What

analysis?
technical
is
Technical

through
primarily
volume),
and
price
terms
(in
action
market
of
study
the
is
(TA)
analysis
the

trends.
price
future
forecasting
purpose
the
for
charts,
of
use

Foundations,

TA
in
concepts
and
premise,
Market

everything.
discounts
action
Prices

persist).
(and
trends
in
move
History

itself.
repeats

Types

Indicators
TA
of

Indicators

price.
on
based
calculated
are
that


Moving

MACD.
and
averages
Momentum

stochastic.
and
CCI,
RSI,
oscillators

Indicators

volume.
on
based
calculated
are
that

On-balance

OBV.
volume
Demand

DI.
index
Volume

VZO.
oscillator
zone
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Indicators

issues.
declining
and
advancing
on
based
calculated
are
that

Advance-decline

line
McClellan

oscillator
Market

index
thrust

History

Analysis
Breadth
of

Colonel
the
Leonard
P.
Ayres,
of
Cleveland
Trust
Company,
is
generally
credited
with
being
first
to
count
advancing

of
count
the
making
called
which
work,
first
his
produced
he
1926,
In
issues.
declining
and
market.
1900,
However,
25
years
earlier,
Charles
H.
Dow,
of
Dow
Theory
fame,
commented
in
his
June
23,
editorial
107
in
Wall
Street
Journal
about
the
number
of
advances
and
declines
thusly,
Of
these
174
stocks,
advanced,

associate,
his
Ayres
Colonel
that
accepted
widely
is
it
However,
still.
stood
20
and
declined,
47
James

today.
used
widely
is
that
concept
the
popularized
Hughes,
F.

When

explaining,
for
credit
the
of
most
gets
Morris
L.
Gregory
today,
know
we
as
analysis,
breadth
to
comes
it
discussing
Market
and
acategorizing
large
variety
of
indicators
based
on
market
breadth
data.
In
his
book
Breadth
from
Indicators,
Gregory
L.
Morris
discussed
clearly
every
form
of
market
breadth
known
to
man,
basic

results.
statistical
valuable
and
examples
chart
of
hundreds
with
applications,
advanced
to

What

Breadth?
Market
Stock
Is

Breadth

dimension
new
a
introduces
Breadth
analysis.
technical
in
aspects
valuable
most
the
of
one
is
analysis
to not
where
it
reveals
true
strength
or
weakness
of
the
targeted
market.
Such
dimension
is
analysis,
attainable
as
from
the
standard
price
8/volume
chart.
Market
breadth
indicators
are
sometimes
referred
to
broad

or
large
indices,
related
more
is
Breadth
stocks.
individual
to
refer
not
do
they
since
indicators,
market
small

analysis.
breadth
in
same
the
are
all
weighted,
capital
or
price
capitalization,

Stock
Jones
market
breadth
ais
tally
of
how
many
stocks
rose
versus
declined
in
value.
Unlike
the
Dow
Industrial
inclusive
Average
or
EGX
(30)
Index,
which
follows
just
30
stocks,
stock
market
breadth
ais
more
ratio,
key
taking
almost
all
stocks
traded
an
exchange
into
account,
rather
than
concentrating
on
ajust
few
stocks.

Stock
market
issues
more
If
trend.
overall
of
overview
larger
much
a
investor
the
gives
breadth
s
close

lower,
close
issues
more
If
positive.
be
to
said
is
breadth
market
stock
yesterday,
than
today
higher
market

technical
the
of
component
key
a
often
market
Stock
negative.
be
to
considered
is
breadth
analyst

indicators.
market
of
arsenal
s

Types

Indicators
Breadth
of

Indicators

issues.
declining
and
advancing
on
based
calculated
are
that

A/D

line
McClellan

oscillator
McClellan

index
summation
Last
updated:
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11:22
22.08.14

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Financial
(For

onward)
2014
October,
1
from
taken
exams

Indicators

volume.
on
based
calculated
are
that

Indicators

volume.
and
issues
A/D
both
on
based
calculated
are
that

Market

index
thrust
Thrust

oscillator

Indicators

highs/lows.
on
based
calculated
are
that

Up/down

oscillator
volume

New

oscillator
lo
hi/new

Indicators

averages.
moving
on
based
calculated
are
that

%of

average
moving
certain
above/below
stocks

There

overall
the
identify
to
is
aim
their
groups;
three
all
combine
or
use
that
techniques
and
ways
many
are
health
reversals.
target
market,
in
terms
analysis,
for
the
sole
purpose
of
forecasting
trend
Moreover,

as
group,
industry
specific
a
or
market
the
in
sector
any
to
applied
be
also
can
analysis
breadth
long

above.
mentioned
components
the
and
constituents
their
determine
to
way
a
is
there
as

These

prive
to
related
obviously
are
They
volume.
and
close,
low,
high,
open,
than
data
different
use
indicators
movements

data:
other
use
but

Number

advanced
that
stocks
of
Number

declined
that
stocks
of
Number

unchanged
were
that
stocks
of
Total

volume
advancing
Total

volume
declining
Total

volume
unchanged
New

highs)
new
made
stocks
many
(how
high
52-week
New

lows)
new
made
stocks
many
(how
low
52-week

These

stock.
particular
a
not
and
situation
market
overall
the
concern
data


For

information.
following
have
can
we
NYSE,
the
on
day
a
during
example,
Number

(30%)
1,243
rose:
that
stocks
of
Number

(67%)
2,756
declined:
that
stocks
of
Number

(3%)
117
stocks:
unchanged
of
Advancing

954,856,870
volume:
Declining

2,051,149,098
volume:
Unchanged

49,848,916
volume:
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2014
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1
from
taken
exams
This

2,756
while
954,856,870,
of
volume
total
had
day
during
rose
stocks
1,243
the
that
means
stocks

on.
so
and
2,051,149,098,
of
volume
total
had
declined
that
Important

breadth
but
highs
higher
make
to
continuing
is
market
the
when
triggered
are
signals
indicators

and
more
as
market,
overall
by
confirmed
is
rise
the
that
means
This
confirming.
not
are
more

reversal.
potential
of
signal
a
obviously
is
which
rise,
market
the
confirm
to
failing
are
stocks

Advance-Decline

Line

The

time.
all
of
indicator
breadth
market
used
and
known
commonly
most
the
perhaps
is
line
advance-decline
Probably

It
time.
test
stood
has
line
advance-decline
the
application,
and
calculation
simple
its
of
because
islong-

market.
certain
a
of
trend
general
the
shows
that
indicator
term

Advance-decline

formula:

AD=
Line
Issues.
Declining

Issue
Advancing

The
valuable
difference
is
added
cumulatively
to
show
it
aas
trend-following
indicator
that
provides
information
A/D
every
day
market
trades.
There
are
many
variations
of
the
advance-decline
line,
such
as
ratio

itself.
line
advance-decline
the
of
versions
smoothed
or

Inbook
his
advance-decline
the
of
average
moving
10-day
a
using
discussed
Appel
Gerald
Investing,
Opportunity
line

reversals.
trend
spot
index
500
S&P
the
to
respect
divergence
negative/positive
with
along

Onother

average
moving
10-day
the
using
preferred
Mamis
Justin
colleague
his
and
Weinstein
Stan
hand,
ofadvance-decline

his
in
discussed
difference,
same
of
average
moving
30-day
a
for
signal
the
as
line
book

Markets.
Bear
and
Bull
in
Profiting
for
Secrets

However,

moving
21-day
a
use
to
preferred
he
that
stated
Indicators,
Breadth
Market
book
his
in
Morris,
Gregory
average

work.
his
of
most
for

Using
study;
raw
or
smoothed
versions
of
advance-decline
line
is
primarily
dependent
on
the
market
under
choppy

numbers
huge
with
markets,
developed
other
while
smoothing,
of
degree
certain
a
require
will
markets
ofissues
traded
every
day,
will
require
far
less
or
no
smoothing
to
begin
with.
Time
is
also
an
important
factor
here;
advance-decline
peaks
may
arequire
certain
degree
of
smoothing
due
to
rapid
changes
in
the
difference,

them.
surrounds
that
environment
dull
the
to
due
not
may
bottoms
while

Calculation

line
A/D
of

A/D
=
Value
Line
A/D
Period s
Previous
+
Stocks)
Declining
#

Stocks
Advancing
of
(#

Example:

Day

25,
Declining
35,
stocks=
Advancing
1,
A/D
10
=
0
+
25)

(35
Line=

Day

25,
Declining
45,
stocks=
Advancing
2,
A/D
30
=
10
+
25)

(45
Line=

Day

17,
Declining
50,
stocks=
Advancing
3,
Last
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2014
October,
1
from
taken
exams
A/D
63
=
30
+
17)

(50
Line=

Day

43,
Declining
25,
stocks=
Advancing
4,
A/D
45
=
63
+
43)

(25
Line=

Day

Declining
65,
stocks=
Advancing
5,
A/D
105
=
45
+
5)

(65
Line=

Plotting

values
A/D
the

The

in
increase
companies
and
shares
numbers
the
time,
with
that
is
calculation
this
of
drawback
stock

change
obviously
will
This
time.
to
time
from
appear
that
IPOs
new
the
with
especially
market,
A-D

results.
the
distort
can
and
time
with
values
line
Another

advancing
dividing
by
ratio
a
take
is
problem
this
overcome
line
A-D
the
calculate
to
way
issues

calculation.
first
in
as
accumulated
be
also
will
results
the
Obviously,
AI/DI.
issues:
declining
by

Another

stocks
declining
and
advancing
between
difference
take
is
ratio
A-D
the
calculate
to
way
and

declines.
plus
advances
of
total
the
by
divide

A-D

*100
(A+D)
/
(A-D)
=
ratio

Using

line
A/D

Zero

crossovers
Crossing

a
is
A/D
regularly,
happen
to
this
expect
dont
but
useful,
be
can
levels
zero
above/below
cumulative/medium
oscillating
to
long-term
indicator,
and
the
way
it
is
calculated
will
not
allow
around

often.
line
zero
the

Divergences

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onward)
2014
October,
1
from
taken
exams
This
great
where
most
useful,
when
NOT
confirming
price
action,
the
A/D
is
of
importance.

new
making
is
the
though
that
reflects
line
A/D
declining
a
with
market
rising
A
highs,
current
nonetheless,
lesser
stocks
are
following
this
uptrend
every
day,
indicating
that
the
uptrend

the
though
that
reflects
line
A/D
rising
a
with
market
declining
A
soon.
reverse
may
isthe
declining,
day.
every
lesser
getting
is
decline
following
are
that
stocks
of
number

General

analysis
trend
This

classical
other
and
trendlines
breakouts,
support/resistance,
apply
to
get
you
where
is
techniques

line.
A/D
the
on

The
of
red
(upper
chart)
represents
A/D
for
the
Egyptian
market.
The
black
line
(lower
part
chart)

line
and
Both
uptrend.
confirming
A/D
chart,
above
In
Index.
(30)
EGX
the
is
are

formation.
highs

lows
higher
forming

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2014
October,
1
from
taken
exams

A/D

period
the
in
uptrend
chart
lower
(black
(30)
EGX
confirming
chart)
of
part
upper
/
(red
line
from

20042007.

EGX

panel.
lower
line
A/D
and
panel
upper
(30)
Failure
weakness
to
confirm
EGX
(30)
higher
lows/higher
highs
during
Aug
Nov
2009
was
the
first
sign
of
(-ve

sign
another
was
This
levels.
support
previous
below
broke
line
A/D
the
October,
late
during
divergence);
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onward)
2014
October,
1
from
taken
exams
of higher
(S/R
breakouts);
later
during
2010,
the
A/D
line
failed
to
confirm
any
of
EGX
(30)
weakness
highs/higher

lows.

A/D

enough
was
levels,
support
previous
below
breaking
by
followed
breakout,
(30)
EGX
confirm
to
failed
line
ofsignal
a
before
weeks
only
and
months
few
after
Later,
followed.
that
decline
sharp
very
the
forecast
to
Jan

from
far
are
conditions
market
that
indicating
levels,
support
previous
below
closed
A/D
the
again
2011,
25
healthy.

A/D
support,
line
failure
to
confirm
EGX
(30)
breakout
during
Jan
2012,
followed
by
breaking
below
previous
was
potential
another
good
example
of
how
the
A/D
ais
leading
indicator
that
marks
medium
to
long-term
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onward)
2014
October,
1
from
taken
exams
moves.

move
(30)
EGX
the
confirming
of
example
good
a
was
2012
Aug
during
breakout
upside
line
A/D
The
that

later.
weeks
few
a
level
6,000
the
nearly
to
went

NSYE

panel.
lower
Composite
NY
and
panel
upper
line
A/D
Again,
of-ve
example
good
a
2007
Nov
during
later
declines
significant
to
lead
that
line
A/D
the
on
divergences
to2008.
Feb

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2014
October,
1
from
taken
exams
S&P
A-D line

The
March
above
chart
shows
S&P
500
along
with
an
A-D
line
for
the
NYSE
data.
As
we
can
see,
during
2003,
its
was
rising
along
with
S&P
500.
During
May
of
same
year,
the
A-D
line
broke
resistance
other
before
S&P.
The
A-D
line
awas
leading
indicator
for
the
S&P
500
some
cases,
and
in
cases

2004,
April
end
during
chart,
of
edge
right
At
(coincident).
S&P
the
with
along
moving
was
A-D
not
line
showing
some
weakness,
forming
lower
highs
formation,
and
abroke
support,
which
was
confirmed

500.
S&P
the
by
yet

NASDAQ
A-D line

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2014
October,
1
from
taken
exams
The
the
NASDAQ
index
along
with
its
line.
As
we
can
see,
A-D
line
rose
during
March
2003,
confirming
market

support,
a
violated
and
formation
highs
lower
witnessed
line
A-D
2004,
April
of
end
the
At
strength.
which

NASDAQ.
the
by
yet
confirmed
not
was

McClellan

Oscillator

The

The
1969.
in
Marian
and
Sherman
by
created
breadth
a
is
oscillator
McClellan
oscillator
exponential
uses
the
daily
advancing
minus
declining
stocks
by
smoothing
them
with
two
different
moving
shows
averages
and
then
taking
the
difference
between
them.
It
ais
short/medium-term
indicator
that
the

market.
certain
a
of
trend
general

The

stock
that
discovered
Marian,
wife,
his
and
Sherman
both
when
came
indicator
the
about
idea
market
During
declined
sharply,
both
moving
averages
19
and
39
EMA
of
breadth
data
reached
very
low
levels.
a both
strong
upward
move,
moving
averages
were
reaching
very
high
levels.
They
discovered
that
when
moving
occurred
averages
went
oversold
levels,
this
was
good
time
to
buy,
even
abefore
crossover
between

and
upside
to
sharply
moved
market
when
token,
same
the
By
averages.
moving
both
moving

sell.
signal
a
was
this
decline,
to
began
then
and
levels
overbought
reached
averages

Calculation

oscillator
McClellan
of

1.
Calculate

stocks.
declining
and
stocks
advancing
between
difference
daily
the

2.a
Calculate
stocks
advancing
between
difference
the
of
average
moving
exponential
19-day
and

stocks.
declining

3.a
Calculate
stocks
advancing
between
difference
the
of
average
moving
exponential
39-day
and

stocks.
declining

4.the
Take
EMA.
days
39
and
EMA
19-day
between
difference

The
Obviously,
McClellan
oscillator
thus
consists
of
one
line
that
moves
above
and
abelow
zero
level.
crossovers
McClellan
between
two
moving
averages
coincide
with
zero-level
violations.
The
idea
of
the
oscillator

MACD.
the
like
lot
a
sounds

Using

oscillator
McClellan
the

crossovers
Zero
When

39-day
broke
EMA
19-day
that
means
it
upside
to
zero
crosses
McClellan
the
EMA
EMA
Aupside.
violation
of
zero
to
downside
coincides
with
the
19-day
breaking

The
A-D.)
of
averages
moving
using
are
we
course,
(Of
downwards.
EMA
39-day
the
zero
However,
crossover
technique
is
not
recommended,
as
it
leads
to
many
whipsaws.
usually
as
positive
in
the
oscillator
bullish,
while
negative
values
are
seen
bearish.

Divergences

The

of
the
when
Usually,
action.
price
with
divergences
track
can
oscillator
McClellan
market

divergence.
negative
a
considered
it
declines,
McClellan
the
and
rising
still
is
gauge
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onward)
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October,
1
from
taken
exams
Positive

such
after
confirmation
price
a
for
waiting
recommend
We
too.
occur
can
divergences
divergences,
occur
as
they
may
not
always
lead
to
profitable
moves.
False
divergences
can
sometimes,
the
so
waiting
for
confirmation
is
required.
Obviously,
divergences
that
occur
in
same

significant.
more
are
trend
major
the
of
direction

and
Overbought
oversold

The
to
McClellan
oscillator
is
very
useful
when
it
reaches
overbought
levels
and
then
begins
turn

unbounded
an
is
it
know,
we
As
afterward.
up
turns
and
levels
oversold
reaches
or
down,
oscillator,
for
so
overbought
and
oversold
zones
can
be
detected
by
visual
inspection.
Usually
the

are
These
levels.
oversold
overbought
strong
as
serve
levels
-200
and
+200
the
NYSE
not

often
volatility
and
stocks
of
number
different
a
has
market
each
as
however,
levels,
fixed
changes

change.
levels
OB/OS
so
market,
stock
the
in

EGX

20082010.
during
(lower
oscillator
McClellan
and
panel)
(upper
(30)
+ve

McClellan
The
successful.
were
them
of
most
period,
2-year
the
during
occurred
divergences
ve
and
oscillator

the
in
used
better
and
action
price
with
along
confirmed
be
must
that
indicator
short-term
very
a
is
direction

trend.
degree
upper
the
of
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Financial
(For

onward)
2014
October,
1
from
taken
exams

EGX

20122013.
during
(lower
oscillator
McClellan
and
panel)
(upper
(30)
Most

All
above.
chart
the
on
shown
are
zero-crossovers
divergences
and
successful,
were
signals
were

trend.
degree
upper
as
direction
same
the
in
applied

S&P

20122013.
during
(lower
oscillator
McClellan
and
panel)
(upper
500
Most

the
above/below
cross
a
for
wait
is
confirm
to
way
Another
successful.
were
divergences
zero

early.
leading
be
still
will
and
circle)
a
by
(marked
line

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updated:
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&
I
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Financial
(For

onward)
2014
October,
1
from
taken
exams

EGX

20112012.
during
(lower
oscillator
McClellan
and
panel)
(upper
(30)
Overbought
best
signals
are
another
advantage
when
using
McClellan
oscillator.
Visual
inspection
is
the
technique

time
over
change
will
levels
that
understand
should
one
and
levels,
such
marking
for
need

adjustments.
some

EGX

20102012.
during
(lower
oscillator
McClellan
and
panel)
(upper
(30)
Last
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Financial
(For

onward)
2014
October,
1
from
taken
exams
Oversold
best
signals
are
another
advantage
when
using
McClellan
oscillator.
Visual
inspection
is
the
technique

time
over
change
will
levels
that
understand
should
one
and
levels,
such
marking
for
need

adjustments.
some

McClellan

Index
Summation

This
McClellan
the
by
created
also
is
indicator

of
function
cumulative
a
Index
Summation
The
s.
oscillator.

oscillator.
McClellan
normal
the
than
smoothed
more
is
It

Calculation

Index
Summation
McClellan
of
1.
Calculate

value.
oscillator
McClellan
todays

2.each
Add
total.
cumulative
to
oscillator
McClellan
the
of
value
previous

McClellan
long-
Summation
Index
shows
real
trend
the
McClellan
oscillator.
It
is
more
aof
medium
to
term
is
indicator
that
will
show
true
strength/weakness
of
the
market
aon
longer
timeframe.
Caution
needed
ais
when
using
Summation
Index
because
signals
are
usually
leading,
but
sometimes
the
lead
time
bit
time
longer
than
expected.
Summation
Index
signals
have
very
high
credibility,
but
issue
of
the
lead
sometimes

appreciated.
highly
and
needed
discipline
the
where
is
this
confusing;
very
becomes

Using

Index
Summation
McClellan

Zero-crossovers

Usually,

money
that
us
tells
it
rising,
and
zero
above
moving
is
index
Summation
the
when
entering
is
the
market.
When
declining
and
going
below
zero,
it
indicates
that
money
leaving

Sometimes
picture.
bigger
us
shows
that
measure
breadth
a
is
It
market.
the
zero

support/resistance.
as
act
will
line

Divergences

Unlike
early
McClellan,
the
Summation
Index
ais
smoothed
indicator,
and
it
gives
us
signals

appear.
they
when
significant
very
are
Divergences
weakness.
or
strength
potential
of
Divergences

false.
rarely
are
index
Summation
the
on

General

analysis
trend
Breaking
using
below/above
previous
support/resistance
levels
is
aalso
good
technique
when
the
of
McClellan
Index.
Moreover,
general
trend
the
Summation
Index
is
great

out
point
you
once
hence,
and
indicator
this
within
common
not
are
Swings
importance.
achange

new
continue
will
that
possible
quite
is
it
direction,
indicator
the
in
direction.

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I
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Financial
(For

onward)
2014
October,
1
from
taken
exams

EGX

20122013.
during
(lower
Index
Summation
McClellan
and
panel)
(upper
(30)
Zero-line

line
zero
Sometimes
successful.
were
signals
the
of
most
circle;
blue
a
with
marked
are
crossovers
acts

chart.
of
left
extreme
the
on
marked
resistance,
as

S&P

20122013.
during
(lower
Index
Summation
McClellan
and
panel)
(upper
500
Zero
are
line
acting
as
support,
marked
awith
blue
circle;
most
of
the
divergences
were
successful
and
followed

moves.
tradable
significant
by

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61

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II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams

EGX

20112012.
during
(lower
Index
Summation
McClellan
and
panel)
(upper
(30)
Positive

a
also
is
resistance
previous
the
of
breaking
arrow;
line
blue
with
marked
are
divergences
blue

false.
rarely
credibility
high
of
are
signals
Both
day.
breakout
the
around
circle
a
and
line

EGX

20082010.
during
(lower
Index
Summation
McClellan
and
panel)
(upper
(30)
The

the
at
circle
blue
with
marked
resistance
zero-line
a
signals,
of
combinations
multiple
shows
above
chart
extreme

divergence
+ve
triple
2009,
of
beginning
the
At
decline.
significant
a
by
followed
was
That
side.
left
showed

ve
new
2009,
Sep
Later
followed.
rise
significant
a
and
market,
the
in
strength
is
there
that
divergence

uptrend.
current
of
end
the
marking
occurred,
signal
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updated:
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2014
October,
1
from
taken
exams

Market

Oscillator
and
Index
Thrust

The

the
shows
that
indicator
medium-term
a
is
It
1993.
in
Chande
Tushar
by
created
was
index
thrust
market
general
advancing
trend
certain
market
aand
technical
indicator
that
plots
changes
in
value
of
the
issues

volume.
their
to
respect
with
issues,
declining
and

First,

sometimes.
picture
obscures
it
why
and
TRIN
of
problems
the
explained
Chande

Asknow,
we
(AV/DV)
/
(AI/DI)
=
TRIN
Which

(DI*AV)
/
(AI*DV)
=
TRIN
that
means
As unusual
explains
in
his
book
"Because
the
index
multiplies
AI
DV
and
DI
by
AV,
it
can
produce
Chande
effects
to
in
mixed
markets,
this
is,
when
AI>DI
AV<DV,
or
AI<DI
but
AV>DV.
It
is
intuitively
contradictory
have
DI*DV)."
AI*AV
than
rather
DI*AV)
(and
AI*DV
of
product
by
driven
index
the
Chande
S.
Tushar
and

Trader.
Technical
New
The
Kroll,
Stanley

Note:
AI:
Issues
Advancing

DI:

Issues
Declining

AV:

Volume
Advancing

DV:

Volume
Declining

Chande
up
used
some
examples
show
how
the
TRIN
can
lead
to
misleading
results
awhen
strong
one-sided
oraction
down
occurs:

Day

AI
AV
DI
DV
TRIN

1
1000

1,000,000

100

100,000

1
2
100

100,000

1000

1,000,000

1
3
1000

1,000,000

100

200,000

2
4
100

200,000

1000

1,000,000

0.5

Day

neutral.
as
days
both
shows
TRIN
day.
down
2
day
while
day,
up
strong
a
is
1
Day

stocks
declining
in
volume
average
the
because
day
bearish
as
it
shows
TRIN
but
day,
up
strong
a
also
is
3
is of
the
average
volume
in
advancing
stocks.
So,
declining
stocks
took
more
than
their
share
greater
volume,

DV.
greater
AV
and
DI
than
bigger
much
is
AI
that
despite
TRIN,
bearish
a
hence
Day
ahad
4
is
bearish
day,
but
TRIN
shows
it
very
bullish.
Why?
Because
on
relative
basis,
advancing
stocks
bigger

1,000
million
1
versus
stocks
advancing
100
for
(200,000
stocks.
declining
that
than
volume
of
%
declining

stocks).

This

versa.
vice
and
values
TRIN
bearish
with
days
bullish
have
can
we
that
means
The
side
thrust
oscillator,
as
Chande
explains,
fixes
this
problem
by
using
advancing
and
declining
issues
in
one
of is
equation
advancing
and
declining
volume
in
other
side.
"The
thrust,
or
power
of
the
move,
measured
on
by
number
of
and
the
volume
going
into
those
stocks.
For
example
5if
stocks
advanced
100
there
500;
next,
7if
stocks
advanced
on
90
shares,
the
thrust
is
630.
Thus,
we
would
say
was

Trader.
Technical
New
The
Kroll,
Stanley
and
Chande
S.
Tushar
day."
second
the
thrust
market
greater

Calculation

index
thrust
market
of
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Financial
(For

onward)
2014
October,
1
from
taken
exams

MT(AI*AV
=
1000,000
/
DI*DV)

Next,

days.
previous
total
cumulative
to
today
of
value
MT
the
add
we
The

line.
A-D
the
like
exactly
accumulated
is
line
MT

Using

index
thrust
market
Zero

crossovers
Crossing

like
regularly,
happen
to
this
expect
dont
but
useful,
be
can
levels
zero
above/below
the

it
way
the
and
indicator,
long-term
to
cumulative/medium
a
is
(MT)
thrust
Market
line.
A/D
iswill
calculated
often.
line
zero
the
around
oscillating
allow
not

Divergences

Like
+ve/-ve
A/D
line
or
McClellan
Summation
Index,
the
MT
index
will
signal
divergences

great
with
technician
the
provide
will
applied,
and
recognized
correctly
once
that,
value.

General

analysis
trend
This

classical
other
and
trendlines
breakouts,
support/resistance,
apply,
to
get
you
where
is
techniques

line.
A/D
the
on

EGX

20062009.
during
(lower
(MT)
index
thrust
market
and
panel)
(upper
(30)
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Financial
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onward)
2014
October,
1
from
taken
exams
The
trend
chart
shows
how
the
MT
ais
trend-following
indicator
and
hence,
general
analysis
such
as
analysis/breakouts

applied.
easily
be
can

EGX

20082010.
during
(lower
(MT)
index
thrust
market
and
panel)
(upper
(30)
The
trend
chart
shows
how
the
MT
ais
trend-following
indicator
and
hence,
general
analysis
like
analysis/breakouts

applied.
easily
be
can

Last
updated:
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II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
EGX

20112012.
during
(lower
(MT)
index
thrust
market
and
panel)
(upper
(30)
The

is
market
declines,
recent
the
despite
that,
suggested
2012
early
in
occurred
that
divergence
+positive
building

few
next
during
level
5,500
the
to
rallied
(30)
EGX
possible.
quite
is
move
upward
an
and
strength
weeks.

EGX

20112012.
during
(lower
(MT)
index
thrust
market
and
panel)
(upper
(30)
Aclear

nearly
at
happened
(both
divergence
positive
of
example
prior
the
to
added
if
that,
breakout
resistance
the
(30)
same
time),
will
provide
enough
evidence
that
may
reverse
direction
to
the
upside.
EGX
rallied

weeks.
few
next
the
over
5,500
to
4,000
from

Calculation

oscillator
thrust
of
TO(AI*AV
=
100
*
+
/
DI*DV)

This

above
moves
that
line
one
of
consists
oscillator
thrust
The
Chande.
Tushar
the
by
created
also
is
indicator
and
Index)
abelow
zero
level.
It
is
more
famous
than
market
thrust
index,
and
it
fixed
some
of
the
TRIN
(Arms
problems.

-100.
and
+100
between
bounded
is
TO
The

The
TRIN:
over
advantages
main
two
has
oscillator
thrust

First,
and
it
both
to
downside
upside.
As
we
know,
the
TRIN
is
bounded
for
up
days
unbounded
downward
for
down
days.
Second,
the
TO
identifies
clearly
upward
markets
and
strong
markets

declining
equation,
the
of
part
one
in
volume
and
issues
advancing
uses
it
as
and

flows.
normalized
providing
by
consistent
more
is
it
So
part.
other
the
in
volume

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Financial
(For

onward)
2014
October,
1
from
taken
exams

Using

oscillator
thrust
Zero

crossovers
The
However,
zero-crossover
technique
is
not
recommended,
as
it
leads
to
many
whipsaws.
usually
as
positive
in
the
oscillator
bullish,
while
negative
values
are
seen
bearish.

Divergences

The
afor
thrust
oscillator
can
track
divergences
with
price
action.
We
recommend
waiting
price
moves.
confirmation
after
such
divergences,
as
they
may
not
always
lead
to
profitable
False
Obviously,
divergences
can
occur
sometimes,
so
waiting
for
confirmation
is
required.
divergences

significant.
more
are
trend
major
of
direction
same
the
in
occur
that

Overbought

oversold
and
Tracking

market
current
insights
useful
provide
can
oscillator
thrust
the
on
levels
OB/OS
conditions.

important.
most
the
are
100
+/-
near
OB/OS

EGX

20082010.
during
(lower
(TO)
oscillator
thrust
and
panel)
(upper
(30)
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Financial
(For

onward)
2014
October,
1
from
taken
exams

The

can
we
As
TO.
of
average
moving
10-day
a
shows
chart
third
and
TO
the
with
along
S&P
see,

oversold
Overbought
signals.
clearer
gives
and
smoothed
more
is
average
moving
10-day
the
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I
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Financial
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onward)
2014
October,
1
from
taken
exams
levels

it
when
signals
good
gives
volatility,
high
its
despite
TO,
The
average.
moving
the
in
clearer
are
approaches

side.
other
the
to
quickly
turns
then
-100
and
+100

New

Oscillator
Low
High-New

The
of
new
high-new
low
(NH-NL)
oscillator
is
one
the
leading
breadth
indicators
that
are
used
to
hint
potential
of
or
weakness
in
market.
It
ais
medium-term
indicator
that
shows
the
general
strength
a high).
certain
market.
Usually,
when
an
uptrend
is
underway,
more
stocks
reach
new
highs
(new
52-week
During
is
a
downtrend,
more
stocks
reach
new
lows.
We
use
this
information
to
construct
an
indicator
that
considered

measures.
breadth
important
the
of
one

of
oscillator
NH-NL
Calculation

The

and
highs
52-week
new
making
stocks
between
difference
the
taking
by
calculated
is
oscillator
NH-NL
stocks

early
us
gives
as
significant,
it
but
calculation,
simple
very
a
is
It
lows.
52-week
new
make
that
warnings.

Using

oscillator
NH-NL
the

Zero

crossovers
Divergences

Overbought

oversold
and

EGX

20082013.
during
(lower
oscillator
NH-NL
and
panel)
(upper
(30)
OB/OS
medium-
extremes
above
awith
small
blue
circle.
Most
of
those
levels
are
marked
either
term

lows.
or
highs

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2014
October,
1
from
taken
exams

NYSE

lows.
major
2012
and
2009
the
marked
values
extreme
Two
20082012.
during
index
NH-NL

Upside-Downside

Volume

The
difference
Up
Volume/Down
Volume
aLine
very
simple
indicator
that
is
constructed
by
plotting
the
daily
between

index.
market
specific
a
for
issues
total
of
downside
and
volume
upside
the

Upside
Downside
Volume
is
the
volume
(AV)
that
accompanies
advancing
issues
ain
certain
day.
Volume

analogy
Using
day.
certain
a
in
issues
accompanies
that
(DV)
volume
declining
the
is
volume
Advance
precedes
price,
Up
Volume/Down
Volume
Line,
should
be
used
in
same
manner
as
the
Decline

indicator.
such
using
when
valuable
most
are
lines
trend
and
divergences
line,

Further

Some
enough.
clear
not
is
plot
raw
the
that
provided
noise,
reduce
help
will
smoothing
or
derivatives
technicians
different
like
to
smooth
the
data
by
ausing
10-day
or
20-day
moving
average;
others
use
two
moving

averages.
two
these
between
crossovers
on
trade
and
averages

Calculation

Volume
Up/Dn
of
Last
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Syllabus
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&
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
1.
Calculate

stocks.
advancing
of
volume
daily
the
2.
Calculate

stocks.
declining
of
volume
daily
the
3.
Calculate

average.
moving
10/20-day
with
outcome
the
smooth
then
and
advancingdeclining

Using

Volume
Up/Dn

Zero

Crossovers

Divergences

EGX

2013.
2012Aug
Aug
during
(lower
Volume
Up/Dn
and
panel)
(upper
(30)
Several

breakouts.
S/R
support,
as
acting
line
crossovers,
zero
divergences,
above,
marked
signals

Using

indicator
breadth
as
average
moving
certain
a

Combining

used
field
the
in
pioneers
Several
idea.
new
a
not
is
indicators
breadth
with
averages
moving
averages
choppy
in
many
different
ways
enhance
most
breadth
indicators.
Some
used
them
to
smooth
breadth

purpose
indicator,
breadth
main
the
for
line
signal
a
construct
to
them
used
others
indicators;
ofadjustment.
timing

A average,
new
technique
can
be
applied
using
long-term
average;
for
aexample,
50-day
moving
where
that
we
calculate
number
of
stocks
above/below
the
moving
average
and
aplot
cumulative
line
represents

and
100%
of
boundary
maximum
with
line,
50%
around
oscillate
will
line
a
Such
difference.
the
minimum
should
boundary
of
0%.
Naturally,
when
line
value
close
to
zero,
the
market
is
oversold
and
we
befor
looking
line.
100%
the
versa
vice
and
rebounds

The
psychology
behind
asuch
method
is
quite
simple;
numbers
provided
reflect
the
underlying
of reflect
market
participants:
high
percentages
of
stocks
aabove
certain
moving
average
at
first
sight
the
bullishness

high
those
view,
of
point
contrary
the
from
But
market.
specific
that
controlling
buyers
strong
and
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Syllabus
II
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I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
numbers
words,
may
have
more
of
bearish
implication
athan
bullish
one
once
they
start
decreasing.
In
other
the

study
to
way
Another
soon.
change
picture
bullish
current
the
and
steam
of
out
running
be
may
buyers
such

such
evaluate
used
techniques
and
ways
the
of
Regardless
values.
extreme
their
monitor
to
is
figures
figures,
support/resistance
it
must
be
implemented
with
conventional
techniques
such
as
trend
analysis
and
concept

analysis.
technical
application
proper
and
discipline
of
sake
the
for

Itquite
is
The
signals.
buy/sell
provide
not
does
generally
analysis
breadth
that
clarify
to
stage
this
at
essential
main

that
setup
preliminary
or
strength
market
current
view
broad
a
provide
to
is
analysis
breadth
of
aim
will
will
help
to
properly
forecast
and
identify
trend
reversals.
aDuring
bull/bear
market,
the
majority
of
stocks
follow

insight.
valuable
a
provide
will
behavior
such
from
deviation
any
trend;
underlying
the

Nonetheless,

conventional
other
action
price
be
always
will
and
still
is
signals
buy/sell
for
driver
main
the
techniques

concept.
momentum
and
patterns
price
support/resistance,
as
such

EGX

20092010.
during
(lower
Volume
Dn
/
Up
and
panel)
(upper
(30)

Using

average
moving
50-day
a
crossover
50%
The

Prior
information.
useful
additional
provides
it
above/below
crossing
zone;
balance
the
is
line
50%
tocross,
the
into
liquidity
of
flow
a
there
showing
rising,
Indicator
The
that
clear
already
is
it
the

valuable
information,
Such
rise.
underlying
the
joining
are
stocks
more
as
study,
under
market
it of
does
not
indicate
that
into
market
is
greater
than
the
liquidity
going
out
is,
the

doubt,
a
beyond
clear
is
it
line,
50%
above
crosses
Indicator
The
time
the
By
Once
market.
that

it.
below
than
greater
is
average
moving
above
stocks
of
number
the
Accordingly,

of
out
than
greater
in
going
liquidity
the
that
assume
to
safe
quite
is
it
market.

it.
with
stocks
most,
not
if
many,
take
will
market
bull
a
all,
After

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Syllabus
II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams

Dow

2008)
Oct
to
2007
(Oct
Chart
Daily
-
(DJI)
Average
Industrial
Jones

From

will
trend
price
underlying
identifying
properly
without
tactic
previous
applying
above,
chart
the
be line
confusing
and
will
agenerate
lot
of
whipsaws.
The
Indicator
crossed
above/below
the
50%
quite
several

confusion.
much
and
whipsaws
caused
crosses
highlighted
the
All
times.

A context.
better
tactic
is
to
identify
underlying
medium-term
trend
first,
then
use
the
50%
zone
in
that
From
same
2007
through
October
2008,
The
DJI
medium-term
trend
was
bearish;
if
we
applied
the
crosses,

good
a
represent
will
below
crosses
all
trend,
medium-term
underlying
of
direction
the
in
but
setup
use
for
selling,
while
the
crosses
above
will
be
completely
ignored.
Accordingly,
it
is
quite
essential
to
The

trend.
medium-term
underlying
as
direction
same
the
in
Indicator

During

uptrend
Once

setup
a
provide
to
used
be
will
Indicator
The
identified,
properly
is
trend
medium-term
underlying
the
for

ignored.
completely
be
will
setups
contradicting
other
while
only,
buying

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II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams

EURO

2006)
Feb
to
2005
(Mar
Chart
Daily

(STOXX50E)
Index
STOXX
From
sell
chart
example
above,
The
Indicator
crossed
below
the
50%
line
twice
1(labels
3),
and
both
setups
line
were
ignored
because
medium-term
uptrend
was
intact.
The
Indicator
crossed
above
the
50%
twice

the
for
account
into
taken
were
setup
uptrend
valid
a
constitute
setups
buy
both
4),
and
2
(labels
sake

uptrend.
medium-term
the
of

During

downtrend
Again,

a
provide
to
used
will
Indicator
The
identified.
properly
be
must
trend
medium-term
underlying
the
setup

ignored.
completely
be
will
setups
contradicting
other
while
only,
selling
for

EURO

2008)
Oct
to
2007
(Oct
Chart
Daily

(STOXX50E)
Index
STOXX
Last
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&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
From
buy
chart
above,
The
Indicator
crossed
above
the
50%
line
two
times
2(labels
4),
and
both
setups

50%
below
crossed
Indicator
The
intact.
was
downtrend
medium-term
the
because
ignored
were
line
medium-term
three
times
(labels
31,
5),
and
all
sell
setups
were
taken
into
account
for
sake
of
the
downtrend.
without
It
is
worth
noting
that
setup
number
6,
where
The
Indicator
rebounded
off
the
50%
line
crossing

setup.
sell
valid
a
as
used
be
may
first,
it
above

During

trend
sideways

Again,
completely
the
underlying
medium-term
trend
must
properly
identified.
The
Indicator
will
be
ignored
upper
during
sideways
trends.
The
Indicator
idea
depends
on
moving
in
same
direction
as
the
degree
not
(medium-term
trend).
Sideways
trend
aalways
nondirectional
move,
and
therefore,
it
is
possible

ones.
remaining
the
action
into
put
and
setups
certain
ignore
to

Dow

1979)
Dec
to
1979
(Jan
Chart
Daily

(DJI)
Average
Industrial
Jones
From
buy/sell
the
chart
above,
during
sideway
trends,
The
Indicator
behavior
will
not
permit
afor
proper
setup

action.
into
put
to

Divergences

Divergence

action
price
between
divergence
Identifying
arsenal.
analysis
technical
the
in
tool
valuable
is
and
divergence
indicators
reveals
hidden
strength
or
weakness
within
the
underlying
trend.
Positive
indicates
during
hidden
strength
when
ain
bearish
situation,
while
negative
divergence
reveals
weakness
bullish

the
once
valuable
quite
be
can
indicators
breadth
on
analysis
divergence
Applying
circumstances.
underlying

identified.
properly
is
trend
medium-term
A is
positive
divergence
between
The
Indicator
and
price
action
set
once
the
index
under
study
forming
Such
a
lower
low
formation,
during
which
The
Indicator
is
simply
rising
or
forming
higher
lows.
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II
&
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
behavior
the
indicates
that,
while
being
ain
bearish
situation
with
respect
to
price
action
lower
low,
flow
the
of
liquidity
is
still
building
up
into
market
under
study,
sas
more
stocks
are
rising
above
moving

average.
A is
negative
divergence
between
The
Indicator
and
price
action
set
once
the
index
under
study
forming
highs.
a
higher
high
formation,
during
which
The
Indicator
is
simply
declining
or
forming
lower
Such

high,
higher
action
price
to
respect
with
situation
bullish
a
in
being
while
that,
indicates
behavior
the

moving
below
declining
are
stocks
more
as
study,
under
market
the
out
going
is
liquidity
of
flow
average.

EGX

20092010.
during
(lower
average
moving
50-day
above
%
and
panel)
(upper
(30)
The

few
next
the
within
rallies
significant
triggered
signals
both
+);
and
(-ve
divergences
two
marks
above
chart
weeks.

Extreme

overbought/oversold

The
or
Indicator
is
very
useful
when
it
reaches
overbought
levels
and
then
begins
to
turn
down,
reaches

0
between
oscillator
bounded
a
is
it
know,
we
As
afterward.
up
turns
and
levels
oversold
100,
is
so
overbought
and
oversold
zones
can
be
easily
marked.
Usually,
the
from
80
to
100
zone
considered

stocks
the
of
less
or
20%
if
all,
After
oversold.
considered
is
20
to
0
from
and
overbought
are
the
above
selected
moving
average,
this
is
considered
an
extreme
oversold
situation,
and
market
are
must
be
declining
for
quite
some
time.
On
other
hand,
if
80%
or
more
of
the
stocks
above
the
selected
moving
average,
this
is
considered
an
extreme
overbought
situation,
and
market
The
must
be
rising
for
some
time.
The
most
important
thing
to
understand
and
expect
is
that
Indicator

triggering
without
time
some
for
zones
oversold/overbought
this
within
stay
will
and
may
any

action.
price
by
confirmed
accompanied
be
must
action
any
and
reversals,

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II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams

EGX

20122013.
during
(lower
average
moving
50-day
above
%
and
panel)
(upper
(30)
Overbought

it
once
but
zone,
overbought
within
while
a
for
stay
can
indicator
the
red;
in
marked
is
zone
breaks

while.
for
decline
probably
most
will
prices
move,
a
such
confirms
action
price
and
zone
the
below

EGX

20122013.
during
(lower
average
moving
50-day
above
%
and
panel)
(upper
(30)
Oversold

level
above
breaks
and
20
to
0
reaches
indicator
the
time
Every
green.
in
marked
zone
toonce
upside
follows.
rally
market
significant
a
more,

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updated:
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Reading
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II
&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
Advantages

analysis
breadth
of
limitations
and
Using

so
strength,
market
for
overview
deeper
a
provides
volume
and
price
than
other
data
of
types
different

chart.
price
standard
the
from

Breadth

groups.
industry
or
sectors,
indices,
major
with
only
concerned
is
analysis

Breadth

volume.
even
or
shares
number
price,
of
regardless
same,
the
stock
each
treats

It of
ausually
leading
type
analysis,
which
provides
valuable
information
for
the
purpose
is
forecasting

reversals.
trend

Breadth
very
analysis
flexible
enough
to
allow
for
several
techniques
and
strategies,
which
is
essential

alternations.
market
to
due

Being
by
leading
has
its
own
limitations
for
providing
signals
too
early,
but
this
can
be
adjusted
enforcing
momentum
conventional
technical
analysis
methodology
such
as
support/resistance,
concept

psychology.
market
and

Most
form,
of
market
breadth
indicators
are
better
used
in
smoothed
form
rather
than
the
raw
which

limitation.
minor
a
consider
may
some

Breadth

hard
even
is
it
markets
emerging
In
providers.
the
among
inconsistent
be
to
seems
data
tobreadth
acquire
data.
Breadth

developments
recent
analysis
Breadth
to
analysis
has
undergone
many
developments
over
the
past
few
years.
From
smoothing
raw
data
original
Index,
equation
adjustment,
all
done
afor
better
Aplot.
good
example
is
the
McClellan
Summation
created
to
by
Sherman
and
Marian
McClellan.
In
the
early
1990s,
James
R.
Miekka
came
up
awith
modification
the
this
McClellan
formula
that
is
today
used
by
McClellans
and
most
of
other
purists
in
the
field.
While
modification
Index,
not
affect
McClellan
oscillator,
it
does
ahave
significant
effect
on
the
Summation
where
calculation
it
is
possible
that
Summation
Index
levels
will
remain
same
no
matter
the
when
began.

Inbook
his
trend
positive
and
indicators
diffusion
the
discussed
Pring
J.
Martin
Explained,
Analysis
Technical
criteria,
price-based
where
he
scratched
the
idea
new
type
of
breadth
indicator
that
autilizes
classic
indicator
this
in
very
different
awayas
breadth
indicator.
That
will
be
aim
the
remaining
part
of
research

paper.

Conclusion

Breadth
leading
analysis
is
very
complex
job
that
arequires
lot
of
time
and
effort.
Breadth
indicators
are
indicators
be
that
will
give
early
signals;
such
signals
treated
as
setup,
while
the
actual
signal
must
triggered
of
from
the
price
action
itself.
There
are
hundreds
breadth
indicators;
make
sure
you
know
few
them

discipline.
and
objectives
trading
your
meet
that

Last
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&
I
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Technician
Financial
(For

onward)
2014
October,
1
from
taken
exams
Appendix

(Continued)
B

Breadth

Analysis
(IFTA

Material)
Reading
I
CFTe
Required

Arms

TRIN

Index

Saleh

CMT
Nasser,
Egyptian

Analysts
Technical
of
Society

The
Arms
Barron s
article
an
presented
originally
and
1960s
the
in
Richard
by
invented
was
Index
inLater,
1967.
(Short
TRIN
of
name
the
by
channels
many
in
publicized
was
and
popularity
gained
indicator
this
Term

charts.
intraday
well
as
daily
in
used
be
can
It
Index).
Trading

of
TRIN
Calculation

The

declining
than
volume
more
gaining
are
stocks
advancing
not
or
whether
see
to
is
calculation
the
of
logic
stocks.

During
volume.
the
of
share
their
than
more
gain
should
stocks
advancing
market,
upward
strong
a
In
declining

mean?
this
does
What
volume.
the
of
share
their
than
more
gain
stocks
declining
market,

The

follows:
as
is
calculation

(A/D)/(AV/DV)

where

issues
advancing
A=

D=issues
declining

AVtotal
=
issues
advancing
of
volume

DV=

issues
declining
of
volume
total

Wethe
divide
is
A/D
if
So
volume.
by
stocks
declining
to
advancing
of
ratio
bigger
declining
AV/DV,
stocks
is
bigger
than
the
ratio
of
advancing
to
volume,
AV/DV
which
means
that
volume
biased
to
declining
stocks.
On
the
other
hand,
if
A/D
is
smaller
than
itthat
means
than
smaller
is
(numerator)
stocks
declining
to
advancing
of
ratio
the
declining
advancing
(denominator).
Volume
in
this
case
is
biased
to
the
upsidemore
volume
with
stocks.

For
million,
example,
if
rose
and
35
declined,
the
volume
of
advancing
stocks
(the
50
stocks)
is
1.5
while

500,000.
is
stocks
declining
of
volume
Then

0.476
3
/
1.428
=
(50/35)/(1,500,000/500,000)
is:
TRIN
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from
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exams
The

than
bigger
much
volume
declining
to
advancing
of
ratio
the
that
means
which
0.476,
is
result
advancing
stocks.
to
Then,
more
volume
is
accompanying
advancing
stocks
than
declining
Obviously,

bullish.
is
this

Inexample,
this
volume.
downward
volume
upward
and
down
than
up
going
stocks
more
have
we

Let

example:
another
at
look
us

Ifstocks
advancing
55
=
Declining

48
=
stocks
Advancing

987,000
=
volume
Declining

970,000
=
volume

TRIN

1.12
1.017
1.14
(987,000/970,000)
/
(55/48)
=

The
bullish
result
1.12,
which
is
considered
bit
bearish.
If
only
look
at
the
raw
numbers,
we
will
aget
feeling:

TRIN
the
However,
volume.
and
stocks
declining
than
advancing
more
tells
is
us
that
volume
beginning
be
biased
the
downside
(i.e.,
ratio
of
advancing
to
declining
stocks
higher

volume).
declining
to
advancing
of
ratio
than

Athird

example:

Advancing

75
=
stocks
Declining

60
=
stocks
Advancing

650,000
=
volume
Declining

1,000,000
=
volume

TRIN

1.92
1.25/0.65
(650,000/1,000,000)
/
(75/60)
=

Ascan
we
stocks,
declining
than
greater
was
stocks
advancing
of
number
the
that
despite
see,
declining
obtained
volume
was
higher
than
advancing
volume.
The
result
(1.92)
tells
us
that
declining
stocks
over

volume.
the
of
share
their
than
more
90%

A TRIN
1result
means
that
both
advancing
and
declining
stocks
are
getting
their
fair
share
of
Avolume.
above

TRIN
a
while
bearish,
is
which
volume,
of
share
their
than
more
getting
are
stocks
declining
that
means
1
below

(bullish).
volume
of
share
their
than
more
getting
are
stocks
advancing
that
us
tells
1

The

falling
while
bearish,
is
TRIN
Rising
prices.
of
direction
opposite
the
in
moves
TRIN,
or
Index,
Arms
bullish.

prices;
of
those
match
TRIN
in
declines
and
rises
that
so
scale
the
invert
to
like
technicians
Some
however,

technician
to
up
It
scale.
inverting
without
is
as
TRIN
the
using
recommended
Arms
Richard
whether
the
to
invert
or
not,
but
it
must
be
understood
that
if
scale
is
not
inverted,
athen
rise
in
TRIN

versa.
vice
and
bearish,
be
will

The

now,
For
oscillator.
thrust
the
through
go
we
as
pitfalls
these
explain
will
We
pitfalls.
its
has
Index
Arms
will

examples.
some
showing
indicator,
this
use
we
do
how
at
look

Index
Arms
the
Using
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from
taken
exams
1-
Using
oversold
and
overbought
as
indicator
raw
the

Richard
1.15
Arms
explained
in
his
book
Trading
Without
Fear
that
the
TRIN
usually
stays
between
0.75
and
about

constitute
they
thus,
rare;
very
are
1.75
above
and
0.5
below
readings
that
mentioned
He
time.
the
of
70%
important

levels.
oversold
and
overbought

Values

overbought
are
0.5
below
Values

oversold.
are
1.75
above

Sousing
when
1.75).
and
(0.5
numbers
extreme
two
to
attention
special
pay
indicator,
raw
the

One

only
could
index
The
limit.
no
have
bearish
while
limited,
are
numbers
bullish
that
is
pitfalls
the
of
go1
from
we
that
means
This
direction.
bearish
infinity
go
can
it
while
direction,
bullish
the
in
zero
to
can

the
themselves
by
define
technicians
that
recommend
we
reason,
this
For
higher.
even
or
3,
2,
of
values
see
levels
by
that
they
see
crucial
as
overbought
and
oversold.
We
should
not
just
stick
on
the
numbers
defined
Arms

levels
oversold
real
where
you
tell
chart
the
Let
oversold.
and
overbought
define
to
are.

The

overbought.
oversold
as
0.5
and
1.75
defined
have
We
TRIN.
with
along
S&P
the
shows
above
chart
Ascan
we
was
trend
major
The
opportunities.
buying
good
as
served
1.75
above
sharply
spiked
that
values
see,
up;

declined
TRIN
the
times,
Many
areas.
overbought
strong
as
serve
not
did
numbers
low
why
is
this
temporarily

decline.
significant
a
witnessing
without
rise
its
continued
market
the
but
rose,
and
0.5
below

2-
Using
TRIN
the
of
average
moving
a

A10-day

of
a
Using
levels.
oversold
and
overbought
define
to
used
usually
is
average
moving
the
be
TRIN
has
advantage
reducing
noise
of
the
raw
data.
Overbought
and
oversold
levels
will
altered

altered.
be
also
can
levels
these
Obviously,
respectively.
1.2,
and
0.7
to

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from
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exams
NASDAQ
10 days MA TRIN

The
left
chart
above
shows
NASDAQ
along
awith
10-day
moving
average
of
TRIN.
The
scale
on
the
belongs

detect
easier
are
signals
see,
can
we
As
TRIN.
belongs
right
on
one
the
while
NASDAQ,
to
than

0.7
around
at
placed
are
levels
oversold
and
Overbought
indicator.
raw
the
using
by
triggered
those
1.2,

A
top.
short-term
a
with
coincided
it
downside,
to
0.7
violated
TRIN
the
when
that
Note
respectively.
break

for
area
oversold
the
in
stays
sometimes
however,
indicator,
The
bottom.
a
signalled
also
1.21.3
above
longer

time.
of
periods

Inbook
his
crossover
double
a
use
can
we
that
mentioned
Murphy
Markets,
Financial
the
of
Analysis
Technical
method.
average
He
advised
using
21-day
and
55-day
averages
of
the
TRIN.
Using
two
moving
crossovers

whipsaws.
generating
of
pitfall
the
has
oscillator
an
with
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crossover

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The
the
chart
above
shows
S&P
500
along
awith
10-day
moving
average
of
TRIN.
As
we
can
see,
overbought
the
between
0.75
and
0.95,
while
oversold
area
lies
above
1.5.
Both
times
when
indicator

S&P.
the
in
appeared
bottom
significant
a
1.5,
surpassed
If S&P
look
at
right
edge
of
chart,
we
will
see
indicator
amaking
higher
low
(bearish)
while
the
was

resistance.
find
to
trying

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from
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exams

From

during
10-day
average,
moving
4-day
Arms
Index,
NYSE
top,
the
20022004.

moving
4-day
with
indicators,
three
the
on
marked
clearly
are
levels
Overbought/Oversold
average

signals.
best
the
providing

TRIN
of
Pitfalls
1.
TRIN

in
zero
to
1
from
go
only
could
index
The
days.
down
unbounded
and
days
up
for
bounded
is
the

direction.
bearish
the
in
infinity
to
go
can
it
while
direction,
bullish
2.
The
declining
equation
is
not
consistent.
Advancing
issue
with
volume
on
one
side,
while
issues
or
with
advancing
volume
in
the
other
side.
aAs
result,
TRIN
will
not
identify
strong
up
days
strong

properly.
days
down

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Appendix

Time

added)
be
(to
Analysis
Cycles
(IFTA

Material)
Reading
I
CFTe
Required

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exams

Appendix

Point

Techniques
Figure
and
(IFTA

Material)
Reading
II
CFTe
Required

Mohamed,

CFTe
CETA,
Younis,
Egyptian

(ESTA)
Analysts
Technical
of
Society

"If
should
you
had
ago
desert
island
and
were
only
allowed
to
take
one
investment
tool
with
you,
then
it
be best
chart.
With
these
words
Robin
Griffiths
described
Point
and
Figure
as
the
the
investment

tool.

27last
Throughout
They
charts.
Figure
Point
of
description
and
definition
the
in
plied
analysts
century,
competed
were
in
order
to
come
out
with
the
best
definition.
Actually
all
definitions
and
descriptions
based
of
on
understanding
and
way
using
the
analysts
themselves.
Just
to
mention
few
these:

28
Tom
Dorsey
stated
that:The
Point
and
Figure
methodology
is
ajust
logical,
organized
way
of
recording

Demand.
and
supply
between
relationship
the
Jeremy
Du
Plessis
descried
Point
Figure
as
the
voice
of
the
market
and
he
continued,
All
other
must
scales
move
forward
as
passes,
whether
the
price
is
changing
or
not.
charts
time
having
When

price
busy
When
move.
not
do
charts
Figure
and
Point
quiet,
is
market
the
isup
moving
movement.
that
show
charts
Figure
Point
down,
and

Inwords
other
as*:
outlined
be
could
charting
Figure
and
Point

An

system
filtration
price
series
time
irregular

This

parts:
three
mainly
has
definition
1)time
Irregular
series
2)filtration
Price
3)System
1)Time
Irregular
Series

We charting
use
Line
Bar
and
Candlesticks
charts
which
fall
under
umbrella
of
the
regular
time
series
all
and

intervals.
time
uniform
occurring
order,
successive
in
points
data
price
of
sequence
a
as
defined
But

charting.
series
time
irregular
the
called
umbrellas
of
kind
another
under
falls
discuss,
to
going
are
we
what

*Authors

view
of
point
Irregular

It
consideration.
into
take
not
does
that
price
a
as
defined
charting
series
time
not

case
In
direction.
in
changes
plots
it
Instead
do.
techniques
other
all
as
time
against
price
plot
ofand
Point
falls.
Os
rises
price
the
as
Xs
of
column
a
plot
we
Figure
Point

family
other
its
from
spotlight
pulls
which
charting
series
time
irregular
famous
most
the
is
Figure
and
members

like:
Kagi
Japanese
charts
Three
charts
TLB
Break
Line
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exams

A
B
2)filtration
Price

We ais
use
price
filtration
in
the
regular
time
series
charting.
The
weekly
chart
for
example
already
kind

into
them
merges
days
working
five
noise
and
volatility
the
all
filters
It
filtration.
of
only

candle.
or
bar
one

are:
important
most
the
but
filtration,
of
types
many
use
we
P&F
Figure
and
Point
In
Box

advance.
in
chosen
amplitude
certain
below
movement
any
ignoring
by
price
the
filters
which
size

Box
trend.
prevailing
or
column
current
of
direction
the
against
moves
filters
Reversal

3)System

System
is:
is
definition
This
whole.
integrated
an
forming
components
interdependent
or
interacting
of
set
A
fully

charting.
P&F
with
line
in
In right
there
are
three
main
components
that
should
be
interacting
harmoniously
in
order
to
get
the
P&F
output

chart.
right
the
or

These

are:
components
1)Variables
Input
2)Size
Box
3)Reversal
Box

Figure

Components
Figure
and
Point
1:

Any
both
may
force
us
to
amake
change
in
one
of
the
other
components
or
of for
in
order
aget
suitable/perfect
output
or
chart.
It
means
that
it
is
always
required
to
search
them
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from
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exams
homogeneity
this
of
system.
ISometimes
aborrow
proverb
and
make
some
changes
in
order
to
explain
issue:

in
fall
me
made
flexibility
of
kind
This
perfect.
it
make
and
chart
the
Take
chart.
perfect
a
for
wait
Dont
love

methodology.
P&F
with

P&F

History

The
Dow
origin
point
and
figure
charts
is
unknown,
but
we
know
they
were
used
at
the
time
of
Charles
around

on
entries
of
direction
from
came
"point"
that
though
have
Some
century.
nineteenth
late
the
the

at
which
plot,
price
of
location
the
to
refers
"point"
likely
more
but
down,
or
up
either
pointing
chart,
first

price.
target
points
figure
to
ability
the
from
comes
"Figure"
mark.
pencil-point
a
just
was

Itnot
does
Point
called
is
today
know
we
method
the
because
name,
its
got
it
how
and
where
matter
really
and

charts.
Point
called
are
analyze
draw
we
charts
the
and
method
Figure

Some

recording
paper
graph
piece
a
taking
by
constructed
were
charts
figure
and
point
first
the
of
price

written
be
would
50
figure
then
$50,
at
trading
was
a
if
instance,
For
box.
each
in
stock
the
of
one

in
fall
began
written.
be
would
51
a
day,
next
$51
to
up
traded
then
stock
the
If
square.
price,

(EARLY
forth
so
48,
49,
50,
figures
recording
begin
and
column
a
over
move
would
chartist
the
POINT
the
AND
FIGURE
CHART).
Over
years,
point
figure
methodology
has
developed,
and
now
prices
(MODERN
are
put
on
vertical
axis
the
numbers
or
figures
have
been
replaced
with
Xs
and
Os
POINT
Os
AND
FIGURE
CHART).
Simply
stated,
Xs
stand
for
demand
and
are
always
moving
up
the
chart,
while
stand

chart;
figure
point
a
of
tenets
basic
Here
chart.
the
down
moving
always
are
and
supply
for
see

CHART.
MODERN
and
CHART
FIGURE
AND
POINT
EARLY

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Figure

Chart
Figure
and
Point
Early
2:
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Figure

Chart
Figure
and
Point
Modern
3:

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Point

Construction
Figure
and
Input

Variables
As To
definition,
Point
figure
charting
ais
system
every
system
has
its
inputs
and
outputs.
the
construct

hourly
or
prices
data
tick-by-tick
they
Are
inputs.
our
know
first
should
we
chart,
Figure
and
Point
a
daily
kind
even
weekly
or
monthly
prices?
Do
we
use
the
open,
high,
low,
close
and
volume
to
construct
this
ofchart?
Actually
It
inputs
tick-by-tick
prices
which
is
preferred
or
it
can
be
any
end-of-interval
time
frame.
depends

frame
time
higher
a
choose
when
that
know
should
you
what
But
view.
of
point
analysts
the
on
interval,

for
filtration
is
chart
weekly
that
before
mentioned
we
Yes,
filtration.
of
kind
a
making
are
you
the

chart.
daily
After

methods:
two
between
choose
to
is
it
interval,
frame
time
the
selecting
1)only
Close
interval
frame
time
selected
of
price
close
the
except
inputs
all
neglects
which
method
2)and
High
interval
frame
time
selected
the
of
low
high
only
uses
which
method
Low

Maybe
Volume.
price
Open
the
for
need
no
there
charting,
Figure
and
Point
in
that
now
clear
is
It
future,

them.
of
advantage
take
to
way
a
find
would
analysts
P&F
or
charting
take
volume
a(as
separate
entity)
into
account
and
accordingly,
does
not
record
graph
In
it.
P&F
claims
that
volume
is
usually
reflected
in
number
of
prices
changes
shown
on
the
chart.
other

clearly
be
will
this
price,
in
movement
significant
a
cause
to
sufficient
is
volume
the
if
words,
reflected

benefits.
clear
without
still
but
volume
graph
programs
software
New
chart.
P&F
the
on

Box

Size

As arepresents
mentioned
before,
modern
Point
and
figure
charts
constructed
column
of
Xs
which
we
sequential

move.
downward
sequential
a
represents
which
Os
of
Column
and
move
upward
XsOs
and
on
depending
constructed
chart
the
before
value
sensitivity
a
given
is
box
Each
boxes.
called
degree

even
it
or
a
1/2
point,
1
be
may
It
size.
box
the
called
is
This
needs.
analyst
that
filtration
of
50points.

Inwords
other
actual
an
for
order
in
allowed
movement
distance
unit
vertical
minimal
the
to
Refers
Size
Box
change

charted.
be
to
value
prices
a
in
Prior

key
certain
at
box
size
changed
arbitrarily
analysts
Figure
and
Point
computers,
of
use
the
to
levels
50,
to
cater
for
large
rises
and
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example,
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ause
box
size
of
0.5
when
the
price
is
below
then
to
1
when
price
is
between
50
100
and
so
on.
There
were
no
strict
rules,
but
the
attempt
was
change

a
create
however,
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method
This
decreased.
or
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price
as
chart
of
sensitivity
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number

problems:
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arbitrary.
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levels.
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changes
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plotting
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atchange-over
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size.
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change
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because
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point
change-over
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count.
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getting
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log
personal
computers
for
Technical
Analysis
has,
however,
allowed
the
construction
of
genuine
scaled

charts.
Figure
and
Point

Box

Reversal
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1
from
taken
exams
Also

order
In
required
boxes
of
number
minimum
the
to
refers
and
or
Amount
Reversal
as
known
move

direction
reverse
in
one
new
a
to
column
existing
an
from
Traditionally

must
price
direction
in
change
a
record
to
where
5-box,
or
3-box
1-box,
been
has
reversal
the
reverse

boxes.
5-
or
boxes
3
1-box,
of
value
the
either
by
1-box

forces
supply
demand
understanding
for
vital
are
and
action
price
of
detail
the
provide
charts
involved.
-
1
that
detail
showing
without
action,
price
the
summary
a
of
more
provide
charts
3-box
box

show
5-box
Finally,
trend.
long-term
medium
short,
the
assessing
for
vital
are
and
show,
charts
the

charts.
3-box
in
shown
detail
the
of
none
with
trend
long-term
main

3-box
unique
the
in
is
difference
main
The
charts.
1-box
from
different
very
are
charts
reversal
filter
asymmetric
used
but
in
reversal.
3-box
charts
consider
the
value
3of
boxes
awhen
reversal
is
being
determined,
the
the
1value
box
awhen
continuation
of
trend
is
being
determined.
This
gives
greater
weighting
to
prevailing

trend.
the
hence
and
column
1-box

In
filter.
symmetric
a
as
it
consider
can
we
so
directions
both
in
price
to
filter
same
the
apply
charts
other
you
words,
aadd
box
to
an
existing
column
if
it
has
moved
in
same
direction
as
the
column,
but
also

size.
the
by
reversed
has
it
if
column
reversal
to
box
a
add

Changing
horizon
among
different
box
reversals
considered
to
be
aas
changing
in
horizon.
The
time
changes

to
reversal
5-box
from
raise
analysts
When
chart.
of
sensitivity
the
change
you
when
3-box

versa.
vice
and
horizon
time
shorter
a
for
looking
are
they
reversal,

There

horizon.
and
between
differentiate
should
we
but
charting
P&F
in
scale
time
no
is
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2014
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1
from
taken
exams

The
tick-
figure
above
illustrates
full
process
to
get
the
P&F
chart.
First
of
all
analyst
should
select
between
by-tick

daily
hour,
an
half
minutes,
5
minute,
1

frame
time
end-of-interval
any
or
preferred
is
which
prices
even

on
depending
method
Only
Close
or
Method
Hi/Lo
between
select
should
analyst
then
input
price
weekly
the

needed.
filtration
of
degree
I But
usually
prefer
Hi/Lo
Method
when
determining
supports
and
resistances
is
important
at
certain
stage.
Close

stages.
other
at
needed
confirmation
breaking
when
important
more
is
Method
Only
Depending

If
reversal.
size
box
suitable
the
select
we
Volatility
instrument
and
needed
Horizon
Time
on
you

lets
so
aim
your
is
horizon
time
the
if
but
first
Size
Box
decide
to
better
be
will
it
issue
volatility
a
facing
are
start

system
a
its
before
mentioned
we
As
variables.
input
tied
totally
are
factors
These
Reversal.
Box
with
and

chart.
perfect
and
suitable
the
get
order
in
tuned
homogenously
be
to
subject
are
factors
all

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updated:
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2014
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1
from
taken
exams
Appendix

Primer

ICHIMOKU
on
(IFTA

Material)
Reading
II
CFTe
Required

Yukitoshi
Higashino,
MFTA
NTAA

Director
Nippon

(NTAA)
Association
Anlaysts
Technical

Preface

Ichimoku

by
developed
method
analysis
technical
a
is
Ichimoku,
just
as
to
referred
commonly
Hyo,
Kinko
Goichi

in
research
of
years
many
his
through
journalist,
market
financial
Japanese
a
(18981982),
Hosoda
financial

as
investors
and
traders
by
used
widely
still
is
Ichimoku
death,
Hosodas
after
years
30
Even
markets.
antool
effective
popular
more
becoming
is
Ichimoku
Although
Japan.
in
trade
and
markets
analyzing
for
among

widely
as
used
be
to
seem
not
does
it
world,
the
around
investors
and
traders
of
number
increasing
an
and

set
integrated
an
Ichimoku
First,
multifold.
are
this
of
causes
The
Japan.
in
is
it
effectively
as
multifaceted

wave
time
projection,
price
including
techniques,
and
principles
analysis
market
analysis,

it
make
theory
Ichimoku
the
in
included
concepts
and
techniques
of
variety
wide
The
others.
among
highly

for
tricky
is
Japanese
exists.
barrier
language
a
obviously,
And
master.
fully
to
challenging
many

very
be
can
it
system
pronunciation
simple
its
with
opinion,
humble
my
in
note,
side
a
(on
Westerners
friendly

Japanese
language).
new
a
learn
to
deciding
when
choices
best
the
of
one
it
making
language,
vocabulary

into
Japanese
translation
making
English,
from
different
very
are
structure
grammatical
and
English

Japanese
many
of
translations
English
right
the
find
to
task
challenging
especially
an
is
It
difficult.
quite
words

practically
is
it
theory,
of
understanding
good
a
has
one
Unless
theory.
Ichimoku
original
the
in
used
impossible

English.
into
materials
educational
Ichimoku
translate
adequately
to

Using

of
aim
with
Ichimoku,
on
primer
this
prepared
have
I
base,
the
as
material
educational
NTAAs
effectively

have
I
study-friendly,
primer
this
make
To
learners.
English-speaking
to
Ichimoku
introducing
made

original
in
Japanese
the
loyal
being
of
instead
words
English
plain
use
to
attempt
an
theory.

work
this
in
simplified
outrageously
been
has
original
the
that
say
may
puritans
theory
Ichimoku
and

real
not
is
Ichimoku
oversimplified
such
say
even
may
They
missing.
are
things
important
of
lot
a
that
Ichimoku.

and
Ichimoku
on
primer
just
this
clear,
very
be
To
criticism.
a
such
in
truth
of
element
an
is
There
not

work
this
treat
should
Learners
theory.
of
tenets
the
all
describing
material
educational
comprehensive
asNevertheless,
such.
hopefully
and
direction
correct
in
interested
the
push
will
document
this
believe
I
inspire

aspects.
complex
more
its
all
out
seek
to
people

Ihope

method
analytical
technical
unique
of
basics
very
the
learn
colleagues
IFTA
my
helps
primer
this
developed

Japan.
in

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2014
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1
from
taken
exams
Introduction

Tothe

losing.
winning
sellersis
or
sidebuyers
which
know
to
needs
only
one
direction,
market
next
The
of
direction
moves
market
chart
The
sellers.
and
buyers
the
between
equilibrium
in
break
developed

was
it
why
is
This
market.
of
state
equilibrium
the
grasp
instantly
to
one
allows
Hosoda
by
named

Japanese.
in
Chart
Equilibrium
Glance
One
means
literally
which
Hyo,
Kinko
Ichimoku

The

level.
price
and
structure,
wave
time,
are
theory
Ichimoku
the
of
principles
basic
three

Inanalysis
Ichimoku,
and
fall,
stocks
Overpriced
market.
in
powers
underlying
the
on
focused
is
underpriced

the
when
rise
often
prices
Stock
infinitely.
falling
or
rising
continues
market
No
rise.
stocks
economy

phenomenon
economic
common
a
This
shape.
good
economy
the
when
fall
and
shape
bad
in
is
that

state
gauging
rationally
for
method
a
is
Ichimoku
system.
the
in
money
of
movements
reflects
financial

powers.
underlying
the
reflecting
fluctuate,
that
markets

The

many
But
this.
simple
as
is
It
fall.
rise
moves,
it
When
flat.
stay
or
move
only
can
market
traders/

overly
analysis
market
of
process
the
they
because
frequently
money,
make
to
fail
investors
complicated.

action
take
not
should
We
rigor.
lacks
process
trading/investment
their
that
is
reason
Another
based

nor
rumors,
unverified
act
not
should
We
projection.
wishful
a
or
analysis
market
subjective
on
weinfluenced

be
to
has
it
projection,
a
on
based
action
an
take
we
When
atmosphere.
market
the
by
measurable.

most
In
strength.
sell
or
weakness
on
buy
should
we
that
saying
people
hear
often
We
cases,

objective
an
provides
Ichimoku
price.
what
exactly
at
state
not
do
and
vague
are
answers
their
however,
base

made
Projections
when.
and
sell
or
buy
to
price
what
at
us
tells
It
action.
trading/investment
taking
for
with

measurable.
always
are
Ichimoku

One

tend
and
moves
price
on
focus
players
market
Most
study.
time
its
is
Ichimoku
traits
important
the
of
tolight
make
more
is
factor
important,
are
moves
price
while
Ichimoku,
In
factor.
time
the
of
important;

markets.
the
of
understanding
true
have
cannot
one
study,
time
solid
a
without

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Financial
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onward)
2014
October,
1
from
taken
exams
2.of
Composition
Chart
Ichimoku
the

Ichimoku

1.
Fig.
in
shown
as
lines,
five
and
chart
candle
a
of
consists
(1)

period)
current
(including
periods
nine
last
the
in
low)/2
lowest
+
high
(highest

line
Conversion
(2)

period)
current
(including
periods
26
last
the
in
low)/2
lowest
+
high
(highest

line
Base
*Base

period.
current
the
in
plotted
are
Conversion
and
line
(3)

line)/2
Base
+
line
(Conversion

1
Span
Leading
(4)

period)
current
(including
periods
52
last
the
in
low)/2
lowest
+
high
(highest

2
span
Leading
*Leading

period).
current
the
(including
ahead
periods
26
plotted
are
2
and
1
spans
(5)

period)
current
the
(including
back
periods
26
plotted
price
Current

Lagging-span
*It

line.
price
current
the
to
parallel
runs
that
line
a
becomes
(6)

2
and
1
span
Leading
between
space
The

Cloud

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1
from
taken
exams
3.Five
The
Uses/Functions
Their
and
Lines
Basic

(1)

Conversion
and
line
Base
The

period),
current
(including
periods
nine
last
in
range
high-low
of
midpoint
the
is
line
Conversion
and

different.
are
but
averages
moving
to
similar
look
may
They
periods.
26
last
of
that
is
line
Base
the
may

in
points
equilibrium
better
represent
to
thought
are
midpoints
Ichimoku,
In
midpoints".
"moving
called
be
the

the
of
Regardless
king.
as
treated
are
prices
closing
averages,
In
averages.
moving
than
market
volatility

if
even
is,
That
counted.
that
thing
only
is
closing
period,
given
a
in
swing
price
the
or
the

the
uses
instead
and
this
dismisses
Ichimoku
reflected.
not
is
it
period,
a
in
widely
vary
swings
price
midpoint

period.
given
a
in
range
price
whole
the
reflect
which
indicators,

When

should
one
that
indicating
generated,
is
signal
bullish
a
line,
Base
above
crosses
line
Conversion
the
start

crossover,
bearish
a
is
it
line,
Base
below
crosses
line
Conversion
When
market.
the
buy
to
looking
signaling

rule.
basic
is
This
market.
the
sell
to
looking
start
should
one
that

When

points:
following
the
mind
in
bear
should
one
this,
implementing

(a)
The

if
Even
market.
as
taken
be
should
line
Base
the
of
direction
Conversion

to
fails
if
bullish
really
not
is
it
line,
Base
the
above
crossed
has
line
turn

up
ends
line
Base
the
in
upturn
an
by
accompanied
not
rally
a
not,
than
often
More
up.
short-lived.

is
it
line,
Base
below
crossed
has
line
Conversion
if
even
token,
same
the
By
not

downswing
a
not,
than
often
More
upward.
trending
keeps
line
Base
the
if
bearish
really
not

short-lived.
up
ends
also
line
Base
the
in
downturn
a
by
accompanied
(b)
The

It
market.
bull
a
in
downward
corrects
price
the
when
support
as
serves
often
line
Base
serves

market.
bear
a
in
upward
corrects
price
the
when
resistance
as
(c)
Instrongly
a
support
as
serves
often
line
Conversion
the
market,
bearish
or
bullish
resistance,

moves.
corrective
any
terminate
to
enough
often
is
that
and

(2)

2)
and
1
span
Leading
between
(Space
Cloud
The

in
(kumo
Cloud
called
is
2
and
1
span
Leading
the
by
formed
area
cloud-like
Japanese).

Following

Cloud:
of
points
principal
the
are

(a)
The
judged
it
Cloud,
above
price
When
direction.
market
the
determine
to
used
is
Cloud
that

that
judged
it
Cloud,
below
price
When
market.
bull
term
longer
a
in
is
market
the
market

market.
bear
term
longer
a
in
is
(b)
The
A
market.
bear
resistance
and
market
bull
a
in
support
term
longer
as
serves
Cloud
break

above
break
A
trend.
market
term
longer
in
change
a
signals
Cloud
the
through
signals

signals
Cloud
below
break
A
bullish.
to
bearish
from
turned
has
trend
term
longer
the
that
that

bearish.
to
bullish
from
turned
has
trend
term
longer
the
(c)
The
it
resistance
or
support
strength
indicates
Cloud
the
thickness
of
degree
provides.

through
break
can
price
The
zone.
support/resistance
a
as
weak
it
thin,
is
Cloud
the
When
with

bull
In
zone.
support/resistance
strong
a
as
serves
it
thick,
is
Cloud
the
When
ease.
relative
market,

upward
market,
bear
a
In
Cloud.
the
in
stop
often
corrections
down
the

Cloud.
(d)
Changes
As
market.
happening
is
what
into
insights
useful
provide
Cloud
of
shape
the
in
result

interacting
2)
and
1
span
Leading
(the
Cloud
constituting
lines
two
the
of
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1
from
taken
exams
with

to
parallel
moving
crossing,
diverging,
other,
approaching
(e.g.,
ways
various
in
other
each
each

markets
many
in
observed
is
it
instance,
For
constantly.
changes
Cloud
of
shape
the
other),
that

and
1
span
Leading
(the
constituting
lines
two
as
twists,
Cloud
the
when
Leading

the
is
So
frequencies.
high
relatively
at
place
takes
change
trend
a
other,
each
cross
2)
span
case

interesting
other
many
are
There
other.
each
approach
2
span
Leading
and
line
Base
the
when
observations,

Readers
primer.
this
of
purpose
the
to
fit
not
would
here
length
at
them
discussing
but
ofprimer
this
of
shapes
changing
the
observing
by
discoveries
own
your
make
to
encouraged
are
Ichimoku

analyze.
or
trade
you
markets
the
in
Cloud

(3)

span
Lagging
The

back.
periods
26
price
closing
current
the
plotting
by
drawn
is
span
lagging

Much

lines.
four
other
and
span
Lagging
between
relationships
the
from
obtained
be
can
information
While

using
direction
market
judge
common
most
line,
Lagging
the
use
to
ways
many
are
there
the

follows:
as
are
span
Lagging

(a)
Lagging
ago)
periods
26
(of
price
Current
vs.
span
IfLagging

below
If
bullish.
it
ago),
periods
26
(of
price
current
the
above
is
span
current

bearish.
is
it
ago),
periods
26
(of
price

(b)
Lagging
Cloud
vs.
span
IfLagging

below
If
upward.
trend
term
longer
Cloud,
the
above
is
span
the

downward.
is
trend
term
longer

(4)

Call
(Bear)
Bull
Safe
a
Make
to
Conditions
Three
According

that
judge
safely
can
one
place,
in
are
conditions
three
following
when
theory,
Ichimoku
the
to
the

state.
(bearish)
bullish
a
in
is
market

(a)

flat.
least
at
or
(down)
up
trending
which
line,
Base
the
(below)
above
is
line
Conversion
The

(b)

ago).
periods
26
(of
price
current
the
(below)
above
is
span
Lagging
The

(c)

Cloud.
the
(below)
above
is
price
The

(5)

Pattern
Top-forming)
(or
Bottoming-out
Typical
Fig.

second
hitting
after
sharply
rise
to
starting
price
the
with
pattern,
bottoming-out
typical
a
illustrates
2
bottom

called
is
bottom
first
from
drawn
line
horizontal
(The
(A).
low
previous
the
below
falling
without
(C)
Border

terminology.)
Ichimoku
the
in
line

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1
from
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exams
Inof
terms
this,
follow
always
not
do
(Markets
patterns.
bottoming-out
typical
are
following
the
Ichimoku,
soshould
readers
example.)
reference
a
just
as
it
treat

second
The
(A).
first
the
of
days
26
within
formed
is
(C)
bottom
several
Within
above
crosses
line
Conversion
forming,
(C)
bottom
second
the
of
days
Base

and
ago),
days
26
(of
price
current
above
crosses
span
Lagging
the
line,
above

Cloud.
the
the
After
The
rate.
accelerated
an
at
rising
starts
Cloud,
above
crosses
price
may

days.
nine
within
rally
resumes
and
Cloud
the
by
supported
gets
it
but
downward,
correct
even
It
is
ideal
aif
breakaway
gap
develops
after
price
hits
the
second
bottom
(C)
and
better

appear.
gaps
consecutive
if
the
Ideally,
line.
Base
below
fall
not
does
price

The

examples.
typical
some
are
These
pattern.
top-forming
a
of
case
the
in
applies
reverse

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1
from
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exams
Fig.

2011.
November
early
to
July
from
company,
security
Internet
Japanese
a
Trendmicro,
of
chart
daily
the
is
3

Ina
September,
(A).
previous
below
falling
price
the
without
formed
was
(C)
low
secondary

).
InOctober,
(
Cloud
price
and
line,
Base
above
crossed
line
Conversion
the
early

Then,
( ).
upward
trending
started
line
Base
the

Subsequently,
( ).
line
price
current
above
crossed
August,
late
in
occured
which
span,
Lagging
the
Now,
the

uptrend.
an
in
is
market
the
that
judge
safely
can
one
which
under
occurred
have
conditions
three

Inthe
mid-October,
further
Cloud,
above
crossed
September,
early
in
occured
which
span,
Lagging
confirming
( ).
uptrend
an
in
was
market
the
that

The
( ).
line
Conversion
by
supported
price
the
and
strong,
was
rally
subsequent

Fig.

2011.
November
early
to
May
from
company,
tobacco
Japanese
a
Tobacco,
Japan
of
chart
daily
the
is
4

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from
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exams

InJuly,
late
below
falling
price
without
formed
was
(C)
low
secondary
line,
Base
the
by
supported
previous

(A).
low

).
a
as
seen
was
This
The
(
Cloud
of
boundary
upper
gapping
Cloud,
the
above
crossed
price
breakaway

signal.
bullish
gapa

The
( ).
gaps
successive
forming
again,
up
gapped
price
bullish.
strongly
was
This

The
( ).
sharply
rising
started
line
Base

During

served
line
Base
September,
early
to
August
late
from
period
for
except
period,
subsequent
the
fairly

basis).
closing
a
(on
support
as
well

From

as
immediately
rebounded
it
line,
Base
below
fell
price
the
although
September,
early
to
August
late
approached

since
stage,
this
at
reversal
trend
possible
a
about
concerned
be
to
need
no
was
There
Cloud.
the
the
( ).
support
strong
provide
would
it
that
indicating
September,
early
in
thick
become
to
started
Cloud

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from
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exams
Fig.

equipment,
tools
medical
and
medicine
wholesaler
Japanese
a
Holdings,
Toho
of
chart
daily
the
is
5
from

2011.
November
early
to
June

The

above
breaking
and
A)
the
than
(higher
C
at
low
higher
a
forming
after
sharply
rising
started
price
the

line.
Conversion
by
supported
was
price
rally,
the
During
Cloud.

Prior

Cloud.
hitting
span
Lagging
because
was
This
B.
at
high
temporary
a
hit
market
the
this,
to

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2014
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1
from
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exams
4.Structure
Waves
Principles

Hosoda,

subject
this
pages
many
spending
detail,
theory
wave
explained
Ichimoku,
on
book
his
in
alone.

is
length
at
discussing
that
think
not
do
I
students,
Ichimoku
advanced
to
interesting
be
may
it
While
within

detail.
great
into
going
without
theory
wave
his
explain
briefly
just
will
I
so,
primer,
this
of
scope
the

Hosoda

their
to
according
groups
of
number
a
into
markets
financial
in
appear
that
patterns
wave
the
classified
wave

time
levels,
price
understand
help
to
designed
are
They
names.
unique
them
gave
he
and
structure,
and

market.
of
direction
the

Iwave:

moves.
corrective
notable
without
down
up
thrust
sharp)
(normally
straightish
or
rectilinear
single
A

Vwave:

or
down,
by
followed
up
thrust
sharp
a
waves,
I
successive
two
of
consisting
wave
A
sharp

up.
sharp
a
by
followed
down
thrust

Nup-down-up
7):
(Fig.
in
seen
commonly
most
pattern
wave
the
is
This
wave.
down-up-down
or
An
market.

Anis
uptrend
downtrend
A
lows.
and
highs
higher
forming
waves
N
series
a
of
up
made
aseries

highs.
and
lows
lower
forming
waves
N
of

When

and
lows
lower
downtrend,
a
In
terminates.
uptrend
low,
previous
below
falls
price
the
highs

formed.
are

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exams

Anterminates
uptrend
top
a
hit
has
market
that
confirmed
is
It
low.
previous
below
falls
price
the
when
when

8)
(Fig.
formed.
is
high
lower
a

Adowntrend

bottom
a
hit
has
market
that
confirmed
It
broken.
is
high
previous
the
when
terminates
when

9)
(Fig.
formed.
is
low
higher
a
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exams

Ywave:

and
highs
higher
forming
the
(with
movements
price
widening
by
characterized
pattern
wave
A
lower

This
formed.
is
pattern
engulfing
Candlestick-wise,
pattern.
triangle
expanding
the
to
similar
lows),
areversal

pattern.

Pwave:

and
highs
lower
forming
the
(with
movements
price
narrowing
by
characterized
pattern
wave
A
higher

develops.
pattern
harami
Candlestick-wise,
pattern.
triangle
normal
the
to
similar
lows),

Swave:

is
low
higher
uptrend,
an
In
trend.
down)
or
(up
large
a
of
middle
the
in
appears
that
pattern
wave
A
formed

low.
formed
is
high
lower
downtrend,
a
In
high.
last
second
the
near
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exams

Example:

Fig.

2011.
March
to
2010
June
from
Average
Stock
Nikkei
the
of
chart
daily
a
is
11

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from
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exams

The

wave".
"I
an
is
B
to
A
from
wave
The

wave.
I
an
also
is
C
to
B
from
wave
The

wave.
V
a
is
C
to
A
from
wave
The

wave.
N
an
is
E
to
B
from
wave
The

price
the
if
terminate
would
uptrend
The
upward.
structured
wave
N
an
is
J
to
E
from
wave
fell

I.
low
the
below

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exams
5.Projection
Price

Inthere
Ichimoku,
principle
the
four
first
The
12.
Fig.
in
below
shown
as
methods,
projection
principal
six
are
ones.

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exams

NN
A)
(B
+
Up:
projection
B)
(A

C
=
Down:
*These

intuitively
it
makes
this
believe
as
both
show
I
but
same,
the
effectively
are
equations
two
easier

following:
the
applies
same
The
readers.
for
understand
to
Up:

low
to
upleg
last
of
distance
the
Add
Down:

high
from
downleg
last
of
distance
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Subtract

Eprojection

B)
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Down:
A)
(B
+
B
=
E
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Up:

high
to
upleg
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of
distance
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low
from
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last
of
distance
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Vprojection

B)
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Down:
C)
(B
+
B
=
V
Up:

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high
to
downleg
last
of
distance
the
Add
Down:

low
from
upleg
last
of
distance
the
Subtract
NT
projection
C)
(A
Down:
A)
(C
+
C
=
NT
Up:
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low.
to
lows
two
last
between
distance
the
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Down:

high
from
highs
two
last
between
distance
the
Subtract
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exams

Yprojection

C)
(A
+
B
=

waves)
Y
in
used
be
(to
Add

high
to
lows
two
last
between
distance
the
Pprojection

C)
(A
+
B
=

waves)
P
in
used
be
(to
Add

low
to
highs
two
last
between
distance
the
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1
from
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exams
Sprojection

A
=

waves)
S
in
used
be
(to

Up:

itself
high
last
second
the
of
level
The

Down:

itself
low
last
second
the
of
level
The

Tohigherdegree
project
whole
projection),
NT
and
E
V,
(N,
methods
projection
principle
four
the
using
targets,
number
(i.e.,
above
used
distances
the
of
multiples
used.
are
lows)
and
highs
previous
between
When

project
four
by
multiplied
are
typically
distances
those
up,
move
big
a
make
to
about
is
market
the
targets

point).
pivot
the
from
subtracted
or
to
added
(and

According

be
should
closing
indices,
for
prices
target
calculate
theory,
Ichimoku
original
the
to
used;

used.
be
should
lows
and
highs
intraday
stocks,
individual
for
prices
target
the
calculate
to

Readers

price
than
important
more
is
factor
time
theory,
Ichimoku
the
in
that
however,
reminded,
are
factor.

targets.
price
the
with
obsessed
excessively
being
avoid
should
One

Let

examples.
of
couple
a
show
me

Fig.

first
hit
It
2012.
into
2011
October
from
manufacturer,
car
largest
Japans
Toyota,
of
chart
daily
the
is
14
bottom

2,472
formed
was
bottom
secondary
The
(B).
2,690
top
intermediate
an
by
followed
(A),
2,330
at
(C).

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exams

Although

B,
high
out
takes
price
before
C
at
formed
was
bottom
secondary
the
that
confirm
cannot
one
one

hold.
would
C
low
that
assuming
targets
the
calculating
start
can

Nprojection:

B),
to
A
(from
upleg
previous
of
distance
the
adding
by
calculated
be
can
targets
The

orwhole
its
C.
at
low
the
to
multiples,
number
N1C
A)

(B
+
=
=2,472
2,330)

(2,690
+
=2,832

N2C
=
2
x
A)

(B
+
=2,472

2
x
2,330)

(2,690
+
=3,192

N3C
=
3
x
A)

(B
+
=2,472

3
x
2,330)

(2,690
+
=3,552

Eprojection:

B),
to
A
(from
upleg
previous
of
distance
the
adding
by
calculated
be
can
targets
The

orwhole-number
its
B.
at
high
the
to
multiples,
E1B
A)

(B
+
=
=2,690

2,330)

(2,690
+
=3,050

E2B
=
2
x
A)

(B
+
=2,690

2
x
2,330)

(2,690
+
=3,410

E3B
=
3
x
A)

(B
+
=2,690

3
x
2,330)

(2,690
+
=3,770

Vprojection:

to
B
(from
downleg
previous
of
distance
the
adding
by
calculated
be
can
targets
The

C),

B.
at
high
the
to
multiples,
whole-number
its
or
V1B
C)

(B
+
=
=2,690

2,472)

(2,690
+
=2,908

V2B
=
2
x
C)

(B
+

=2,690

2
x
2,472)

(2,690
+
=3,126

V3B
=
3
x
C)

(B
+

=2,690

3
x
2,472)

(2,690
+
=3,344

NTThe
projection:
to
A
(from
downleg
previous
of
distance
the
adding
by
calculated
be
can
targets

C),

C.
at
low
the
to
multiples,
whole-number
its
or
V1C
A)

(C
+
=
=2,472
2,330)

(2,472
+
=2,614

V2C
=
2
x
A)

(C
+
=2,472

2
x
2,330)

(2,472
+
=2,756

V3C
=
3
x
A)

(C
+
=2,472

3
x
2,330)

(2,472
+
=2,898

The

in
method
this
use
to
adequate
was
it
as
chart,
the
on
displayed
not
is
projection
NT
particular

case.

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onward)
2014
October,
1
from
taken
exams

Fig.

the
hit
It
2012.
into
2011
October
from
company,
trading
Japanese
integrated
an
Sojitsu,
of
chart
daily
a
is
15
first

rallied
it
Then
(C).
116
secondary
a
by
followed
(B9),
131
top
intermediate
an
and
(A)
114
at
low
formed

(E).
129
terminated
that
dip
brief
a
by
followed
(D),
138
at
top
intermediate
an

Iwill

that
ones
only
above,
discussed
methods
projection
by
projected
values
target
the
all
show
not
looked

case.
particular
this
in
relevant

The

(B)
high
intermediate
and
(A)
low
first
using
method
projection
E
the
by
projected
prices
target
are:

E1B
A)

(B
+
=
=131

114)

(131
+
=148

E2B
=
2
x
A)

(B
+
=131

2
x
114)

(131
+
=165

E3B
=
3
x
A)

(B
+
=131

3
x
114)

(131
+
=182

The

secondary
and
(B)
high
intermediate
first
using
method
projection
V
the
by
projected
prices
target
low

are:
(C)
V1B
C)

(B
+
=
=131

116)

(131
+
=146

V2B
=
2
x
C)

(B
+

=131

2
x
116)

(131
+
=161

V3B
=
3
x
C)
-
(B
+

=131

3
x
116)
-
(131
+
=176

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1
from
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exams

The

high
intermediate
and
(C)
low
second
using
method
projection
E
the
by
projected
targets
(D)

are:
E1D
C)

(D
+
=
=138

116)

(138
+
=160

E2D
=
2
x
C)

(D
+

=182
2=
x
116)

(138
+
138
E3D
=
3
x
C)

(D
+

=204
3=
x
116)

(138
+
138

The

and
(D),
high
intermediate
(C),
low
second
using
method
projection
N
the
by
projected
targets
third

are:
(E)
low
N1E
C)

(D
+
=
=129

116)

(138
+
=151

N2E
=
2
x
C)

(D
+

=173
2=
x
116)

(138
+
129
N3E
=
3
x
C)

(D
+

=195
3=
x
116)

(138
+
129

One

there
that
see
can
one
case,
particular
this
In
prices.
target
projected
of
areas
cluster
for
alert
be
should
are

160165.
and
146151
at
zones
cluster

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2014
October,
1
from
taken
exams
Fig.

to
September
from
Japan,
in
based
company
chemical
diversified
Kayaku,
Nippon
of
chart
daily
a
is
16
December

2012.

Iam

projection.
time
with
together
done
be
must
projection
price
the
how
show
to
this
including

The

732
low
intermediate
(A),
829
at
high
using
method
N
the
by
projected
price
target
first
(B),

it
when
bottom
hit
market
Actually,
B)).
(A

(C
706
was
(C)
803
at
high
secondary
the
and
approached

There
reversal.
trend
for
window
time
projected
a
during
place
took
It
710.
at
price
target
said
the
were

day
on
centering
zone
time
The
(B).
low
second
and
(A)
high
first
the
between
days
trading
26
trading

off.
day
one
just
bottom
actual
The
window.
time
projected
was
(C)
top
second
the
after
days

Iwill

section.
next
the
detail
more
in
projection
time
discuss

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exams

6.Projection
Time

One

factor.
time
on
places
it
importance
degree
is
theory
Ichimoku
the
of
characteristic
striking
Hosoda

influences
Time
market.
the
in
fluctuate
prices
as
passes
merely
time
that
not
is
It
taught,
The

time.
by
dictated
is
market

Reversal
Dates
a)Reversal
Inprojected
principle,
directions
reverse
to
is
market
which
on
dates
the
are
dates
Reversal
athigh
relatively
probabilities.

b)Acceleration
The

trending
down)
or
(up
strongly
In
however.
date,
Reversal
a
on
reverse
always
not
does
market
market,

This
date.
reversal
a
on
reverses,
of
instead
accelerates,
simply
sometimes
move
existing
the
happens

that
market
is
there
Suppose
market.
uptrending
an
than
market,
downtrending
a
in
often
more
has

window,
time
that
during
direction
reverse
cannot
it
If
date.
Reversal
a
into
declining
moderately
been
oftentimes

sharply.
falling
starts
it

c)Extension
Comparatively

market.
downtrending
a
market
uptrending
an
in
often
as
happen
not
does
this
speaking,
Inuptrending
an
a
with
date,
Reversal
projected
after
directions
reverses
sometimes
market
the
market,
delay,

window).
time
reversal
(of
extension
called
phenomenon
a
to
due

Apart

dates.
Reversal
on
rise
to
tends
volatility
phenomena,
acceleration
and
reversal
the
from

According

Base
of
interaction
by
caused
are
extension
and
acceleration
theory,
Ichimoku
the
to
line,

line.
Lagging
and
line,
Conversion

Reversal
projection
date
Ichimoku

or
separately
used
be
can
methods
These
ways.
two
following
the
in
dates
Reversal
calculates
simultaneously.

a)number-based
Basic
projection
b)parity-based
Time
projection
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2014
October,
1
from
taken
exams

Basic
projection
number-based
Reversal

17,
9,
(e.g.,
theory
Ichimoku
in
numbers
Basic
the
called
what
adding
by
projected
are
dates
26)

this.
illustrates
17
Fig.
future.
into
past
in
direction
reversed
market
which
on
dates
the
to

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2014
October,
1
from
taken
exams
Following

After
theory.
Ichimoku
original
according
data
daily
with
used
be
to
numbers
Basic
the
are
many

parameters.
default
useful
most
the
were
these
that
concluded
Hosoda
research,
of
years

(Fig.

data
daily
with
used
be
to
numbers
Basic
18)
Basic

number
Comments

9
Useful

tops/bottoms
intermediate
calling
for
17
Useful

tops/bottoms
intermediate
calling
for
26
Useful

markets
up
in
33
Particularly

markets
down
in
useful
42
Very

markets
down
and
up
both
in
important
51

65
More

down
than
markets
up
in
useful
76
More

down
than
markets
up
in
useful
129

More

down
than
markets
up
in
useful
172

More

down
than
markets
up
in
useful

Some

numbers
Basic
as
added
be
should
21
and
13,
5,
found
have
they
that
claim
researchers
Ichimoku
when

data.
weekly
with
dealing

Advanced

accordance
analysis
wave
with
conjunction
in
numbers
Basic
the
use
practitioners
Ichimoku
with

be
to
likely
are
numbers
Basic
gauge
helps
which
discussedearlie,
principles
structure
wave
the
most

effective.

Time
projection
parity-based
Inmethod,
this
between
days)
of
number
(the
distance
time
same
the
adding
by
projected
are
dates
Reversal
two

on
(a
date
pivot
to
past)
direction
reversed
market
which
(on
past
the
in
dates
key
which

of
advantage
takes
This
future.
into
project
to
which
from
bottom)
or
top
major
a
hit
market
the
phenomenon

key
a
from
passed
has
time
of
amount
same
when
direction
reverses
often
market
the
that
reversal

markets.
events
major
between
time
of
amount
as
past
the
in
date

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2014
October,
1
from
taken
exams

Fig.

this.
illustrates
19
(1)

date
to
D
low
and
C
high
between
days)
of
number
(the
distance
time
the
Add
into

future
the
(2)

date
to
D
and
B
low
between
days)
of
number
(the
distance
time
the
Add
into

future
the
(3)

date
to
D
low
and
A
high
between
days)
of
number
(the
distance
time
the
Add
into

future
the
(4)

D
low
date
to
C
and
A
high
between
days)
of
number
(the
distance
time
the
Add
into

future
the

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2014
October,
1
from
taken
exams
Fig.

counted
are
51)
42,
33,
26,
17,
(9,
numbers
Basic
The
2011.
in
Average
Stock
Nikkei
the
of
chart
daily
a
is
20
from

is
it
Also,
dates.
projected
on
behaved
market
how
show
to
C,
and
B,
bottom
A,
top
the
shown

A,
(top
events
market
major
same
of
dates
the
using
made
were
projections
parity-based
Time
how
bottom

C).
top
and
B,

The

a
into
plunging
started
and
A
the
after
number)
Basic
(a
days
9
near
top
intermediate
an
hit
Nikkei
major

top
after
number)
(a
days
51
point
Near
17.
number
Basic
the
by
projected
was
which
B,
low
A,intermediate
an
77)
number
Basic
a
to
(close
days
79
C
major
hit
Nikkei
the
And
formed.
was
top
after

B.
low
major
the
Time

manners:
following
the
in
conducted
were
projections
date
Reversal
parity-based

There

this
Adding
8).
(July
C
and
21)
(February
A
top
the
between
days
trading
95
were
number

25.
November
at
projected
was
Reversal
a
C,
top
date
the
to
(95)
days
of

There

(79)
of
number
this
Adding
C.
top
and
B
low
the
between
days
trading
79
were
todate

1.
November
at
projected
was
Reversal
a
C,
top
the
of

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from
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exams
Fig.

subsequently:
happened
actually
what
shows
21

On 1November
28
(Fri),
just
two
trading
days
off
from
the
projected
Reversal
date
of
October
(Tue),

(E).
top
intermediate
considerable
a
hit
market
the

On25,
November
(F).
low
major
a
hit
Nikkei
date,
Reversal
projected
exact
the

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October,
1
from
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exams
Fig.

C.
low
date
the
from
counted
are
numbers
basic
The
Average.
Stock
Nikkei
of
chart
daily
a
is
22
market

17
at
E
C,
low
the
after
number)
Basic
(a
days
9
D
top
intermediate
considerable
a
hit
days

and
low,
said
days
26
F
top
intermediate
an
C,
low
the
after
number)
Basic
(a
terminated

with
projected
zones
time
The
low.
said
the
after
number)
Basic
(a
days
33
G
at
consolidation
Basic

actions.
market
interesting
with
corresponded
also
51
and
42
numbers

The

period.
during
hit
lows
and
highs
notable
dates
between
days
of
number
the
are
numbers
circled
One

one
Also,
turns.
market
call
to
well
worked
projection
parity-based
Time
the
that
notice
would
notice

number-based
run
separately
sure,
be
To
numbers.
Basic
to
close
are
numbers
the
that
projection

converge.
often
projection
parity-based
Time
and

The

believe
practitioners
Ichimoku
dedicated
many
and
Hosoda
why
show
to
enough
be
not
or
may
above
time

time."
by
dictated
is
market
and
market,
the
influences

Wenever
will
expectations
unfounded
or
rumors
follow
attempt
we
long
as
market
the
in
win
to
able
be
inmarket,

market
unknown
find
try
imperative
It
money.
make
to
way
the
is
this
that
thinking
drivers,

factors
other
or
news
on
based
market
the
about
think
not
should
We
ones.
known
chasing
than
rather
that

on,
judgment
a
make
and
evaluate,
We
round.
way
other
the
be
should
It
known.
already
are
publicly

market,
bull
major
a
of
end
At
behaving.
is
market
the
how
on
based
factors
known
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2014
October,
1
from
taken
exams
full

When
abound.
stories
negative
market,
bear
major
a
end
the
At
stories.
and
news
positive
of
the

should
we
when
moment
very
the
is
it
stories,
news
negative
or
positive
such
to
reacting
stops
market
enter

and
swiftly
it
do
to
have
We
market.
in
players
side
other
from
course,
of
market,
the
decisively.

past
oftentimes
moment;
decisive
the
at
uneasy
feel
will
alone,
judgment
our
on
rely
we
If
failures

professional
as
do
to
have
we
what
prevents
This
present.
the
on
focusing
from
us
prevent
market

market,
playing
for
flair
develop
present,
the
on
focus
us
help
to
tool
great
a
is
Ichimoku
players.
and

trader/investor.
professional
a
as
must
we
what
do

Created
colleagues
IFTA
for
(NTAA).
Association
Analysts
Technical
Nippon
of
material
educational
the
on
based

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updated:
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