Introduction on Stock Trend Chart Basis
"It is simple to complicate things but it is complex to make things simple" - Nameless Hero
The charts on this site are generated by a proprietary trend model invented by Raymond Tsang, aka Nameless Hero, the developer of this site .
I am trying to simplify it here so first I will first walk you through a list of chart features and then I will explain how to apply them.
Here is a list of chart features:
A - The stock name with symbol enclosed by parenthesis.
B - The time in eastern region the chart was generated; in this example the chart below was generated after market close.
C - Bullish level. A meassurement of the asset's trading activities. This value can swing between 0 - 100% while 0% means extremely bearish and 100% means extremely bullish.
D - Green background gradient - forecasts the stock is going to trend upward.
E - Redbackground gradient - forecasts the stock is going to trend downward.
F - Period of the chart. This can be daily, weekly or monthly depending on chart type.
G, H, I - A green bar suggests the current trend is upward. A red bar suggests the current trend is downward. A black bar suggests the current upward trend is stronger than usual. G the bottom bar represents long term trends; H, the middle bar represents middle term trends and I, the top bar represents short term trends. When all bars share the same color means the current trend is likely to continue.
J - The closing price or current price on that particular date.
Consistency That Matters!
To understand how the charts work we need to know that the price is not important. We are looking for the consistency of the color bars only. On the same day if all bars (G, H, I) share the same color then it creates a more accurate trend signal. A trend can be as short as one day (unusual) or whatever days the trend could last. A mixed color of bars represents consolidation or flat in technical terms. Most of the time the bar colors can reliably predict the direction of the next trend.
Bullish level measures the “bullishness” of the stock. This value swings between 0 to 100% and 100% mean extremely bullish while 0% means extremely bearish. As a rule of thumb, we shouldn't buy a stock when the level becomes extremely bullish. We should instead wait for 2 signs to enter buy trades: a low bullish level and the appearance of the 1st of 3 green bars. Alternatively, we can wait for the 2nd or 3rd green bars to obtain a better price, as most of the time you can get a better price then, than buying at the 1st green bar.
Stock Trend Charts vs Traditional Technical Indicators
Single traditional technical indicators generally: don’t provide reliable trading signals, have a steep learning curve, and users have to "tune" the parameters. They are also prone to not working in different scenarios. The trending charts we provide have everything you need. They are designed to be simple to interpret, very reliable and don’t require tuning by the user. The best analogy to use in comparing traditional indicators to our model is 2D vs.3D.
Stock Trend Charts vs Cycle Theory
What's the Magic Behind Stock Trend Charts?
Believe it or not there is no magic behind Stock Trend Charts. The model was created based on the boom and bust theory, just like Tai Chi. It measures the momentum of the trades people do, which is reflective of the price movements and volume force. After the noise is filtered out signals are revealed and, amazingly enough, trends are observable and reliably to trade. The model has been sharpened over the years to be able to provide signals at this level and is presented in such a way that most people are able to understand. The model is hardly fooled by market manipulations because it measures the underneath movements instead of pure price movements.
Weekly and Monthly Charts
These charts work the same way as daily charts. The weekly and monthly charts just provide a bigger picture that daily charts can't give. Basically it works like a zoom out which gives extra information. These longer period charts complement what daily charts project. If the weekly chart shows upward trend while the daily one shows downward, then more likely the daily trend will reverse back to upward quickly and this provides opportunties for people to "add" to their position. Monthly charts work the same way, by helping to complement both weekly and daily charts.
Note we offer weekly charts to our registered users and monthly charts are only available to our paid subscribers.