The Broadening Formation And The Bond Market by Thom Hartle
Trading the bond futures market offers opportunity to the skilled chartist because a diversity of price patterns occurs over time. In reality, chart patterns are accumulation, distribution, consolidation or trending periods. If you are able to accurately recognize an accumulation period — that is, demand, support or a price bottom — and are positioned (long) for the markup in prices (an uptrend), then the accuracy of your work can be quite profitable.
The same can be said for correctly appraising a distribution period (otherwise known as a top, resistance or supply) prior to a markdown in prices (a downtrend). Another approach is to attempt to let others determine tops or bottoms and focus your own energy on successfully trading consolidations. Accomplishing this over time is no easy task. It can be inferred from the tremendous liquidity of the bond markets that players are both numerous and high quality. All the participants have the same goal, clearly indicating that the competition for profits is equally intense. There is no substitute for education and experience.
Experience gives the trader insight into what may be referred to as the personality of the bond market. Understanding that personality can change your attitude from wanting to beat the market to being in sync with the market. Being attuned to the market's nature can increase profitability.