Sunday, December 04, 2005

The Importance of the Number Three

The number three shows up very often in technical analysis of stocks. Major bull and bear markets have three important phases. There are three kinds of gaps, the commonly known reversal patterns, such as the triple top and 'head and shoulders' have three peaks. There are three major classification of trends: major, secondary, and minor); and three trend directions (up, down and sideways). Among the generally accepted continuation patterns, there are three triangles–symmetrical, ascending and descending. THere are three principal sources of information–price, volume and open interest.

For whatever reason, the number three plays a very prominent role throughout the field of technical analysis.

Excerpted from Technical Analysis of Financial Markets, by Joesph Murphy

[Author's Note] Interestingly, there are three persons in the Christian Holy Trinity (Father, Son and Holy Spirit), and three persons in the Hindu Holy Trinity (Brahma, Vishnu, and Mahesh)

Posted by Eclectic Investor at 4:35 PM  

1 Comment:

Rajeev mundra said...

some more three..!!

When the Spanish explorer Cortez landed at Veracruz, the first thing he did was burn his ships. Then he told his men: “You can either fight, or you can die.” Burning his ships removed a third alternative: giving up and returning to Spain.

We either wake or dream or die.. again 3..!!

Room cooling Fan has 3 pokes.

We have 3 dimensional co-ordinate system.

We make arranged marriage, love marriage or we dont marry..!! again 3..!!

:-))

5:09 PM  

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