When a swing point is surpassed, there almost always is a retest of that swing point somewhere down the line. L.A. points this out and provides the data to support it in his book Trend Trading Set-Ups. He then goes on to describe how the test takes place in terms of price, time and volume and how you can use this knowledge to improve your odds of trading success.

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Classic Definition of Trend

Every market either goes

• up (bullish
• down (bearish)
• or sideways (neither bullish nor bearish)

This up and down movement is referred to as a trend. There are three time frames that trends are apparent and generally agreed upon (see Edwards and Magee)

• Long Term (Primary)
• Intermediate (Secondary)
• Short Term (Minor)
  

Many times, when you look at a chart on any of the timeframes you will see a high volume bar at the top of the chart. If no other bar exceeds it's high price on this timeframe, that is referred to as volume at the top. On a practical basis, volume at the top almost always gets revisited by price somewhere in the future. It becomes a magnet for price somewhere down the road.

Volume off the top is a situation where volume expands significantly as prices decline from a nominal high. It is not necessary that the high volume bar be the high price bar on the timeframe you are examining but it must be with a couple bars of the high volume bar. Volume off the top is a clear warning sign that on the timeframe you are examining, something has gone awry. It is a danger sign and usually means that you want to exit your positions or, at a minimum, become very defensive in your trading for the instrument this has happened to.

If you would like to tune into TA TV and not be bother with commercials, then read on.

Technical Analysis as applied to the trading of securities, refers to the study of the market itself. It is the science of recording price action and massage that data in an attempt to predict probable future price behavior. Over the years, many technical indicators have been created for their predictive ability. The problem with technical analysis is that the body of behavior being studied is constantly changing and adapting and therefore, unlike the hard science, technical analysis is primarily composed of probabilities.

There are numerous books that have been written on this subject. The most authoritative of those writings is Technical Analysis of Stock Trends by Edwards and Magee. This comprehensive writing was first penned back in 1948 and has stood the test of time. This and other books on the subject can be found in either traditional bricks and mortar book stores or on line versions of the same.

There are online trading glossaries that contains many technical analysis terms.

The following information is gleaned from a conservation L.A. has with resident economics contributor Patrick Barron. The question L.A. posed was "Who really owns the Federal Reserve". There are assertions that it is not-governmental and privately owned. Is that true?