The Bell Does Ring
The Bell Does Ring supports the belief that it is possible to pick market tops and bottoms. To support its claim, The Bell Does Ring describes a collection of methods that people could consider using to stay ahead of the crowd.
The book begins with a look at the power of crowd psychology, by exploring previous booms and busts. Pauline provides a good summary of previous financial mishaps with a look at Tulip Mania, the Mississippi Scheme, the South Sea Bubble and the more recent Poseidon and Asian financial crises. By learning how to watch out for and identify signs of fear and greed the alert trader is able to identify tops and bottoms and stay ahead of the crowd.
Following the look at crowd psychology, Pauline provides a review of reversal patterns that can be used to identify turning points. From head and shoulders and diamonds to double and triple tops and bottoms, the book provides clear and concise examples of how reversal patterns have developed in the past and so can be identified in the future. A look at traditional continuation trend patterns such as pennants, wedges and triangles follows. There is a brief discussion on technical indicators.
Pauline then entertains the reader with the core part of her book – an explanation of Elliott Wave. Part III, which discusses Elliott Wave, occupies 10 of the 18 chapters. In her discussion of Elliott Wave, Pauline provides a good summary of the role Fibonacci plays. With clear and concise charts, the reader is given a good introduction to Elliott Wave and how the identification of a 5th wave can signal market tops and bottoms.
The Bell Does Ring finishes with a discussion on WD Gann and how the use of his ideas can help to time reversal points. Looking at squaring the triangle and circle and Gann’s square of nine, readers are given an insight into timing trades.
In summary, The Bell Does Ring provides an introduction to reversal patterns, Elliott Wave and an element of Gann’s work. The book is well written and easy to follow with plenty of chart examples to support the narration. My only note of caution is that, although appealing, looking to identify tops and bottoms is usually fraught with danger and littered with more tears than smiles.
This article was originally published in the Sep/Oct 07 issue of YourTradingEdge magazine (www.YTEmagazine.com). All rights reserved. © Copyright 2009, MarketSource International Pty Ltd.
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