Multiple Signals Mean Enhanced Reliability
Some of the impreciseness of
charting can be offset with confirming signals. A simultaneous short- and
long-term trend break is a much stronger signal than either one considered
separately. The break of a head-and-shoulders neckline that corresponds to a
channel support line is likely to receive much attention. Whenever there are
multiple signals converging at, or near, a single point . . . that point gains
significance. In chart analysis, the occurrence of multiple signals at one point
can compensate for the quality of the interpretation.
–Perry J. Kaufman, from Trading
Systems and Methods (1998, John Wiley & Sons, New York).