The Angle Of Ascent by Martha Stokes, CMT
Understanding the concept of the angle of ascent will help
you make strong entries and protect your profits.
Successful traders know that technical analysis
skills require an understanding of buy signals
and indicators. Today, we tackle angle of ascent.
Angle of ascent involves price, which is the most
important aspect of technical analysis and an
indicator onto itself. Yes, price is an indicator — the most important of any. Why? Because the stock market,
while closely tied to mathematical concepts, is even more
closely related to biology. If that seems foreign, think of it this
way. Humans are not mathematical formulas; we are biological
creatures. We think with our minds and emotions and feel
our way through life. Human beings move price action in the
stock market. Consequently, the ability to analyze price
action and determine what it is telling you is a crucial, and generally misunderstood, aspect of trading and investing.
Price analysis is overlooked so often that traders bond in
solidarity at trade shows, discussion forums, and lecture
circuits over the common problem. The gist of the issue is
this: When traders go in search of stocks to trade, they often
enter stocks just as a run is weakening or about to reverse. If
you understand the concept of angle of ascent, you will be
able to avoid weak entries and protect profits against bounces,
whipsaws, and trend reversals.
WHAT IS IT?
The angle of ascent is the degree at which price rises in its
trendline. It is relevant to all trading and investing timelines
and can forewarn of weaker entries and topping and bottoming
patterns before these patterns can be identified. Traders
who use angle of ascent analysis increase their success rate by
discarding weaker angle patterns and selecting more ideal
entries for their trades.