- The length or extend of any given “leg” within a given price trend (i.e. price move, in the same direction as the trend) will often approximate the length (extent) of the preceding leg, as measured from the extreme of the reaction following the leg.
- Under the theory of action and reaction there is another rule that should be noted. It is that in an advancing market each stage of advance will tend to be equal to the previous advance, and in a declining market each stage of decline will also tend to be equal to the previous decline.
- Again in this instance, the rule is not a precise one. In fact, in a normal bull market I would say that the stages of advance should tend to become broader, with the broadest move of all coming during the final phase of the bull market. In a normal bear market the tendency should be just the reverse.
- On the basis of this rule, the technical market student can frequently accept profits against the trend to a good advantage on trades that are made in harmony with the trend movement.
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