Unlike many pure chartists, Trader Vic heavily emphasizes the role of the Federal Reserve, interest rates, and government policy. He outlines how the economic business cycle dictates long-term bull and bear markets.
In the text, Sperandeo illustrates that when price makes a new high, but the oscillator fails to confirm it, the underlying momentum of the trend is waning. This provides the trader with a warning signal before the price action confirms the reversal. This method underscores a psychological truth of the market: prices may continue to rise due to inertia, but the smart money (informed buyers) has ceased participation. Unlike many pure chartists, Trader Vic heavily emphasizes
The price tests the previous high (in an uptrend) or low (in a downtrend) but fails to make a new high/low. This provides the trader with a warning signal
Sperandeo dedicates significant portions of the text to the psychology of the trader. He notes that the "market is a mechanism of transfer" where money moves from the impatient to the patient. He argues that the greatest enemy to the trader is their own ego. Sperandeo dedicates significant portions of the text to