00 value across the board. The one main element that attracted investors is the commission-free trading. Plus, most forex firms require lesscapital to initiate a start-up account than a futures account does. In fact, investors can open accounts on their debit and/or credit cards, and the practice of accepting payments online through PayPal exists.Some firms offer smaller-size flexi accounts, allowing traders to startapplying their skills at technical analysis with as little as $500 and tradingultraminiaccounts with leverage. This feature of what is known as miniaccounts allows individual investors to adjust their positions by not havingtoo big a contract value per position; they can add or scale into greater orlesser positions to adjust the level of leverage according to their accountsize. Smaller-size investors are not excluded from trading; they can participate with minicontracts. What is great about this feature is that a newtrader or an experienced trader who is testing a new system can trade themarket with real money, rather than simply paper trading, and benefit fromthe actual experience of working out execution issues and, more important,of seeing how they handle the mental or emotional side of trading. Havingreal money on the line certainly helps teach people to learn about theiremotional makeup. This is one great way to overcome the fear-and-greedsyndrome that many traders seem to battle. Another excellent quality thatforex miniaccounts have is that traders with low-equity accounts can affordto trade multiple positions without being exposed to excessive risks likefull-sized positions for scaling out of positions in order to let a portion ofthe position ride a profitable position, while capturing profits on a partialexit. We will go over more on that style of trading later.
What Benefits Do Forex Firms Offer?Besides offering leverage accounts, other benefits that most forex companies offer are free real-time news, charts, and quotes with state-of-the-art
64
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
order-entry platforms; and some even have automated order-entry featuressuch as one cancels the other and trailing stops. All of these tools andorder-entry platforms come at no additional charge to the trader.These features may sound too good to be true. With all the benefitsthat the forex market offers, most newcomers want to know what thecatch is. There are some slight cost factors that relate to execution;you pay a premium or a higher spread to buy and a higher spread tosell. Also, most forex companies take the other side of your trade; youdo not have direct access to the interbank market, as it is called. Sincethe forex market is decentralized, it is possible that five different companies are showing five different prices all at the same time within a fewpoints (PIPs—percentage in points). Since most forex traders are shortterm in nature, meaning they are quick in-and-out players, day tradingin the forex markets is beneficial for these traders due to the fact thatthere are no commissions; but the PIP spreads can and do add up. Therelies the catch.
Buy and Sell the SpreadForex prices, or quotes, include a “bid” and an “ask” similar to other financial products. The bid is the price at which a dealer is willing to buy and atrader can sell a currency; and the ask is the price at which a dealer is willing to sell and a trader can buy a currency. In forex trading, unlike futuresor equities, you have to pay a percentage in price (PIP) spread on enteringa trade. The PIP spread is the point difference between the bid and the asking price of the spot currency price. This can vary between two and fourPIPs on a euro versus U.S. dollar spread. The spread varies on other currency pairs and is usually wider on more exotic cross markets, such as theCanadian dollar versus the Swiss franc.If you want to hold a position for several days, a rollover process isnecessary. In the spot forex market, all trades must be settled within twobusiness days at the close of business at 5 P.M. (EST). The only fee involved here is the interest payment on the position of currency held. Attimes, depending on the position, a trader can receive an interest paymentas well. This is where the term tomorrow/next (Tom/Next) applies. Itrefers to the simultaneous buying and selling of a currency for delivery thefollowing day.As with futures, forex markets are now regulated to an extent andcome under the scrutiny of the self-imposed regulators, such as the National Futures Association after the CFTC Modernization Act passed in2002; but since there is no centralized marketplace, many forex dealers canand do make their own markets, as discussed earlier.
Trading Vehicles, Stock, ETFs, Futures, and Forex
65
Why Trade Spot Forex Markets?Of all financial instruments traded, forex is believed by many professionaltraders and analysts to be one of the best-suited markets to trade based offtechnical analysis methods, for a number of reasons. First is its sheer sizein trading volume: According to the Bank for International Settlements, average daily turnover in traditional foreign exchange markets amounted to$1.9 trillion in the cash exchange market and another $1.2 trillion per day inthe over-the-counter (OTC) foreign exchange and interest rate derivativesmarket as of April 2005. Second, the rate of growth and the number of market participants in forex trading have grown some 2,000 percent over thepast three decades, rising from barely $1 billion per day in 1974 to an estimated $2 trillion by 2005. Third, since the market does not have an officialclosing time, there is never a backlog or “pool” of client orders parkedovernight that may cause a severe reaction to news stories hitting the market at the U.S. Bank opening. This generally reduces the chance for pricegaps. Currencies tend to experience longer-lasting trending market conditions than other markets. These trends can last for months or even years, asmost central banks do not switch interest rate policies every other day.This makes them ideal markets for trend trading and even breakout systems traders. This might explain why chart pattern analysis works so wellin forex trading. With such widespread groups playing the game around theworld, crowd behavior plays a large part in currency moves; and it is thiscrowd behavior that is the foundation for the myriad of technical analysistools and techniques.Due in part to its size, forex is less volatile than other markets. Lowervolatility equals lower risk. For example, the S&P 500 Index trading rangeis between 4 percent and 5 percent daily, while the daily volatility range inthe euro is around 1 percent.Trading veterans know that markets are interdependent, with somemarkets more heavily influenced by certain markets than others. We covered some of these relationships looking at futures and certain stocks andhow changes in interest rates can move equity markets as well as the currencies markets. We will learn in coming chapters how to detect hidden yetrepeating patterns that occur between these related markets and how forextraders can profit from these patterns.
Which Is Bigger—Stocks or Forex?Forex is by far the largest market in dollar volume, is less volatile, experiences longer and more accentuated price trends, and does not have tradingcommissions. Forex is the ideal market for the experienced trader who has
66
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
paid his or her “trading tuition” in other markets. However, there are nofree lunches. Traders must use all the trading tools at their disposal. Thebetter these fundamental and technical tools, the greater is their chance fortrading success. While intermarket and other relationships are often complex and difficult to apply effectively, with a little high-tech help, tradersand investors can enjoy the benefits of using them without having to scraptheir existing trading methods.
Forex versus FuturesThe futures market through the International Monetary Market (IMM) ofthe Chicago Mercantile Exchange has many benefits as well. Some believethere are tighter spreads between the bid and the asking price, plus there isno interest charge or rollover fee every other day. In addition, the futuresmarkets offer options for longer-term traders. There are transactions coststhat apply per round turn; but if the brokerage commission exchange, regulatory, and transaction charges are less than the PIP spread in forex, anactive speculator would be given a better cost advantage by using the futures markets instead of the forex spot markets.Let’s compare a trade in forex to a trade with a similar-size contractvalue on the futures exchange, using the example of a euro futures contracton the CME, where it has a contract size of USD 125,000 worth of euros,where each PIP would be 12.50 in value. If the commissions and relatedfees are on a par with most discount brokerage firms, $20 is your transaction cost per round turn, that is, $10 to buy and $10 to sell out the position.Keep in mind that the contract value is 25 percent higher than a fullsize forex position, too. If a day trader in forex does a $100,000 full-lot-sizecontract and pays three PIPS on every transaction for both the entry andthe exit of each position, this trader would be charged $30 per round-turntransaction.The futures arena also has other interesting features and products; oneis the U.S. dollar Index® contract traded on the New York Board of Trade,as was shown in Figure 1.34. That index is computed using a tradeweighted geometric average of six currencies. It virtually trades around theclock—the trading hours are from 7 P.M. to 10 P.M., then from 3 A.M. to 8:05A.M., and then from 8:05 A.M. to 3 P.M. Unlike the forex, there are daily limits on the price movement with 200 ticks above and below the prior day’ssettlement, except during the last 30 minutes of any trading session, whenno limit applies. Should the price reach the limit and remain within 100ticks of the limit for 15 minutes, then new limits will be established 200ticks above and below the previous price limit. Figure 1.35 shows a breakdown of the various currencies and their respective weights on the average.The top four include the euro, which is the heaviest weight at 57.6 percent,
Trading Vehicles, Stock, ETFs, Futures, and Forex
67
FIGURE 1.35
followed by the Japanese yen at 13.6 percent, then the British pound at11.90 percent, and the Canadian dollar at 9.10 percent.
FOREX TRADERS BENEFIT FROM FUTURESMARKETS INFOForex traders can integrate futures data to help in trading decisions, suchas taking a trading signal based on chart patterns in the futures and translating it into a trading trigger signal in a forex market. Because spot FX andfutures trade in tandem, the price difference is called the basis. Generally,day-to-day, they are geometrically equal (within a few PIPs). Since, as wediscussed, forex markets are decentralized, there is not a collective database to measure two distinct studies, such as volume and open interest.These are important tools, so let’s review what the basics are and how aforex trader can use this futures information.Volume is the number of trades for the total contract months of a givenfuture’s contract, both long and short combined. For example, the futures
68
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
foreign currency markets trade on quarterly expirations—the March, June,September, and December contract months. The volume will represent thetotal for all the trades in each contract month. Most technical analysts believe that volume is an indicator of the strength of a market trend. It is alsoa relative measure of the dominant behavior of the market. A further explanation is that volume is the measurement of the market’s acceptance orrejection of price at a specific level and time. There are several theories andso-called rules when using volume analysis on price charts: First, if a market is increasing in price and the volume is increasing, the market is said tobe in a bullish mode and can indicate further price increases. Second, theexact opposite is true for a declining market. If price is declining and volume increases, it is said to be in a bearish mode and indicates further pricedecreases. However, if a substantial daily market price increase or decrease occurs after a long steady uptrend or downtrend, especially on unusually high daily volume, the move is considered to be a “blow-off-top orbottom exhaustion” and can signal a market turning point or a trend reversal. Here are some guidelines to use when using volume analysis.• Increasing volume in a rising price environment signals excessivebuying pressure and could lead to substantial advances.• Increasing volume while prices are falling may signal a bear move.• Decreasing volume while prices are climbing may indicate a plateauand can be used to predict a reversal.• Decreasing volume with a weaker price environment shows thatfresh sellers are reluctant to enter the market and could be a sign of afuture downtrend.• Excessive volume while prices are high indicates that traders are selling into strength and often creates a price ceiling.• Excessively low volume while prices are low indicates that traders arebuying on weakness and often creates a floor.Open interest reveals the total amount of open positions that are outstanding in existence and not offset or delivered upon. Remember that infutures trading, this is a zero-sum game so that for every long there is ashort or for every buyer there is a seller. The open interest figure representsthe longs or shorts but not the total of both. So when examining open interest, the theory or general guidelines are that when prices rise and openinterest increases, this reveals that more new longs have entered the market and more new money is flowing into the market. This reflects why theprice increases. Of course, the exact opposite is true on a declining market.Chartists combine both the price movement and the data from volume andopen interest to evaluate the “condition” of the market. If there is a priceincrease on strong volume and open interest increases, then this is a signal
Trading Vehicles, Stock, ETFs, Futures, and Forex
69
that there could be a continued trend advance. Of course, the opposite istrue for a bear market when prices decline. Also, if prices increase, volumestays relatively flat or little changed, and open interest declines, then themarket condition is weakening. This is considered to be a bearish situationbecause if open interest is declining and prices are rising, then this showsthat shorts are covering by buying back their positions, rather than newlongs entering the market. That would give a trader a clue that there is a potential trend reversal coming.Here is a guide as to how to use this information to identify an opportunity when there is a major top or bottom in the spot forex markets: Whenobserving a continued long-term trend in a spot forex currency, if it tradesas a futures contract (whether it is in an uptrend or a downtrend), whenprices start to fluctuate with wider than normal daily price swings, orranges, or are in an extremely volatile condition, if it is combined with unusually strong volume and a decline in open interest, this is referred to as aclimaxing market condition. The market is getting ready to turn or reverse the trend.In Figure 1.36, the graph is a split chart of the futures euro currency ontop with the volume and open interest study in the middle. The spot forexeuro currency is on the bottom. Notice that after the peak in prices, the vol-
FIGURE 1.36Used with permission of esignal.com.
70
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
ume was increasing, as was the open interest. This was a warning that atrend reversal was forming, rather than a small correction. Therefore, spotforex traders would have a better decision-making process, that selling rallies and looking to take sell signals at resistance would be a more fruitfuland profitable course of action.
INSIDER TRADING INFORMATIONThere is one more source of information that stock and spot forex currency traders can borrow from the futures industry. It is the Weekly Commodity Futures Trading Commission’s Commitment of Traders (COT)report. The CFTC market surveillance staff closely monitors trading activity in the futures markets in order to detect and prevent instances of potential price manipulation. Some consider this “insider trading” informationbecause every week we get to take a look at which investor group is takingwhich side of a trade. (There are many studies and books written on thesubject. In fact, it was covered in my first book on pages 162–165.)As a futures trader for over 26 years, I have used this information tocapture many significant moves in the markets. Figure 1.37 shows that
FIGURE 1.37
Trading Vehicles, Stock, ETFs, Futures, and Forex
71
there are several categories. The first is the “non-commercial”—all largeprofessional traders or entities, such as a hedge fund, a commodity tradingadvisor, commodity pool operators, and locals on and off the exchangefloors. Any trading entity that hits a reportable position limit (for instance,in the CME currencies, at the end of 2005, the limit was 400 contracts) is reported by the clearing firm to the exchange, which then turns the information over to the CFTC.The next category is the “commercials”—banks and institutions ormultinational conglomerate corporations looking to hedge a cash position.The long and short open interest shown as “nonreportable positions” arederived by subtracting total long and short “reportable positions” from thetotal open interest. Accordingly, for nonreportable positions, the number oftraders involved and the commercial/non-commercial classification of eachtrader is unknown. This balance of positions is assumed to be the smallspeculators. If you look at the first column under non-commercials, youwill see the breakdown of long positions versus short positions. The nextline down shows the changes from the prior week; this is important information because you will be able to see if these guys unloaded some of theirpositions or added to them from one week to the next. The line under thattells you the percent of longs and shorts that are held. The last line showshow many traders there are that control longs or shorts. The information isgathered as of the close of business every Tuesday by each of the clearingbrokerage firms and is turned over to exchange officials, who then reportthe information to the regulatory body know as the CFTC. This informationis released on Friday afternoons at 3:30 P.M. (ET).It is critical before acting on a decision based on this information to seeif there was a major price swing from Tuesday’s close to the time the information was released on Friday, because positions may have changedhands. For example, in Figure 1.37, if the British pound was at 1.7400 at 5P.M. on Tuesday and the price at Friday’s close was 1.7000, it will indicatea 400-point move. If the COT showed small speculators net long, I will assume that the speculators were no longer long, as not many small speculators can handle a 400-point loss.Can traders benefit and make money from this information? The answer is that there is always a chance to make money. The key is to be ableto afford to be not too heavily leveraged if the market moves further thananticipated. The COT is like an insider information report. It acts like a trueconsensus of who literally “owns” the market. A forex trader can use thisdata to determine in a long-term trend run if market participants are tooheavily positioned on one side of the market. It is generally the small speculator who is lefty holding the bag. Let’s face it—money moves the market,and the banks and large professional traders are a bit savvier when itcomes to their business. After all, one would think a bank has a good idea
72
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
of what direction interest rates are going to go once a central bank meeting occurs, right?Suppose the small speculators are showing a nice short position of, say,at least two longs for every one short. If the non-commercials are net longand the commercials are net long, chances are that the small speculatorswill be wrong. I am looking for imbalances in markets that have been in atrending market condition for quite some time, and therefore I can developa game plan and start looking for timing clues to enter trades accordingly.Keep in mind that the commercials sometimes are not right; they are not inthe market to time market turns. They are hedging their risk exposure in acash position. Therefore the non-commercials, or professional speculators,in the short term are considered the smart money.Here are some general guidelines to follow for using the COT Report:• If non-commercials are net long, commercials are net long, and thenonreportable positions category is net short by at least a two-to-onemargin, look at buying opportunities. In other words, go with the pros.• If non-commercials are net short, commercials are net short, and thenonreportable positions category is net long by at least a two-to-onemargin, look at buying opportunities.• If non-commercials are net long, commercials are net short, and thenonreportable positions category is neutral, meaning not heavily netlong or short, look at buying opportunities and stick with the smartmoney speculating non-commercials.
WHAT EVENTS MOVE THE CURRENCY MARKETS?Traders need to be aware of several key elements and events that can causecurrency values to move. For one, intervention plays a role in the currencies. When the Bank of Japan felt that its export business would suffer atthe hand of an overvalued yen, it would intervene and sell yen to buy U.S.dollars. Countries like Canada and Australia, which produce raw commodities, saw a rise in their currency valuations as global demand increased for their goods and as their economies improved as well.Foreign currency markets are mainly influenced by international tradeflows and investment flows, which are the same factors that influence theequity and bond markets:• Economic and political conditions.• Interest rates, inflation, and political instability.These factors have a long-term impact, which makes forex attractiveto trade due to the long-term trending conditions established by central
Trading Vehicles, Stock, ETFs, Futures, and Forex
73
bank decisions based on these factors. Forex also offers investors some diversification necessary to protect against adverse movements in the equityand bond markets. Japan is closer to changing its zero-interest rule policy;and when it does, it may attract money back to Japan and boost its currency value
STUDY THE “MACRO” ISSUESTraders who are new to forex can take comfort in knowing that analyzingand forecasting exchange rate movement rely solely on macroeconomicfactors—the “big picture” issues and concepts for which information isreadily available and intuitively grasped. Once traders have an understanding of the big picture pertaining to an economic region, they can placetrades in the currency market to profit from their analysis. Currency traderswho are looking to capture big moves in exchange rate movement definitely should focus on three issues when attempting to assess the value ofcurrencies:1. Interest Rates—The Carry-Trade Strategy. Each foreign currency has
a central bank that issues an overnight lending rate. This is a primegauge of a currency’s value. In recent history, low interest rates haveresulted in the devaluation of a currency. Many analysts assume this isa function of the carry-trade strategy employed by many hedge funds.This is a trade where one buys and holds currencies in a high-yieldinginterest rate market, such as the United States, and sells or borrowsmoney from a foreign country where the currency is in a low-yieldinginterest rate market, such as Japan. There is a significant risk exposureto this investment, which requires large capital or a highly leveragedposition from an exchange rate fluctuation.2. Unemployment Rate. The unemployment rate is a strong indicator of a
country’s economic strength. When unemployment is high, the economy may be weak and, hence, its currency may fall in value. The opposite is true as well. The question that many economists look to answeris what a specific country’s full-employment capacity level is. Thatknowledge will give clues to the peak in productivity and economicoutput. That knowledge also helps determine a country’s capital flowsand, therefore, is good information for currency traders to follow forlonger-term trend identification.3. Geopolitical Events. Like all markets, the currency market is affected
by what is going on in the world. Key political events around the worldcan have a big impact on a country’s economy and on the value of its re-
74
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
spective currency. Turmoil, strikes, and terrorist attacks, as we havewitnessed in the new millennium, all play havoc with and cause shortterm price shocks in the currency markets. Terms such as “flight tosafety,” as traders move money from one country to another, causeshifts in currency values. These events need to be monitored by forextraders as well.Forex traders use fundamental analysis as described earlier to identifytrading opportunities by analyzing economic information for a longer-termperspective. Short-term traders should also understand what and when reports can cause a shift in currency markets. Knowing what time is best totrade the markets will help you nail down when a potential trade may materialize. As the pie chart in Figure 1.35 showed, the largest percentagevalue traded against the U.S. dollar was the euro. Therefore, that wouldrepresent the European session. The central place of foreign currency dealings is London, where the second-most-active trading volume occurs.Therefore, it is where there are likely to be large range swings in the market, granting day traders an opportunity to profit. The European sessionruns from 2 A.M. (ET) until 11 A.M. (ET), so a euro currency to U.S. dollar(EU/USD) or euro currency to British pound (EU/BP) or a British pound toU.S. dollar (BP/USD) would be an appropriate pair selection to trade.The U.S. session opens at 8 A.M. (ET), which overlaps the European session; and these two sessions combined generate the bulk of trading activity.Most major U.S. economic reports are released at 8:30 A.M. (ET); and, as expected, the currency markets generally react off those reports. This offerstraders the opportunity to trade off what is normally a violent price spike.Once the U.S. markets close at 5 P.M. (ET), the currency markets are available to trade; but it is not until the Asian session opens at 7 P.M. (ET) thatmarkets will experience potential price swings. The Australian dollar (AUS)and Japanese yen (JY) would be what traders would want to focus on, andthe trade opportunities there would be the USD/JY or the USD/AUS or thecross pair trading the JY/AUS. Notice that the Asian markets overlap theEuropean session as well, so a Japanese yen versus euro currency cross(JY/EU) is a popular pair to trade. Here are the time zones a trader wants tofocus on when trading spot forex markets.• European session—2 A.M. (ET) until 11 A.M. (ET).• U.S. session—8 A.M. (ET) until 5 P.M. (ET).• Asian session—7 P.M. (ET) until 4 A.M. (ET).The prime trading periods for day traders are from 12:30 A.M. (ET) until5:30 A.M. (ET), from 7 A.M. (ET) until 12 P.M. (ET), and from 1:30 P.M. until 5
Trading Vehicles, Stock, ETFs, Futures, and Forex
75
P.M. (ET). These periods are when peak volumes occur, due to the openingof the European session and economic reporting times in Europe. Then, asthe U.S. market opens, you have the window of opportunity to trade off thevolatility from the time when U.S. reports are released. In the afternoon ofthe U.S. session, volume increases as traders rush to balance their positionsbefore the end of the day. These are the select times to trade forex markets(more information can be found at www.fxtriggers.com).For the most part, day and swing traders use technical analysis to identify opportunities from specific chart patterns that demonstrate frequent reoccurring results. They need to trade in active time periods, trading offtrend lines and moving averages, which are a form of trend line analysisthat will help in certain market conditions. We will go over a set of movingaverages that is different from what is normally written about and that willhelp identify conditional changes in the market, thereby giving forextraders a better edge. We will also incorporate and show you how to calculate support and resistance levels from mathematical-based models, suchas pivot point analysis, and other means, such as Fibonacci correctionsand extensions, to identify opportunities and drive trading decisions. Theseare the methods I will be covering in this book to help you form a tradingplan based on specific rules and conditions for trading the forex markets.
CHAPTER 2
DeterminingMarket ConditionBullish, Bearish, or Neutral
would say the hardest thing for any trader to do is buy high, especiallyafter seeing a huge run in the market. Buying high is a technique thatvery successful professional traders use. It is also a contrarian approach. After all, if you feel that the value cannot go any higher, it probablywon’t, right? This market condition generally tempts traders to sell. That isabsolutely the wrong thinking! In most bull markets, that thinking fallsunder the category of “picking tops without cause,” “justification,” and“trading based off a set of rules or technical reasons”! Do not try to anticipate what the market will do next. Simply go with what the market tells youit is currently doing. In other words, try to avoid concerning yourself withwhy the market is moving; focus on what is occurring. That is my definitionof staying in the now and, most important, staying with the trend.Forget that last week the market may have taken a nosedive or that yesterday the market rallied significantly. Concern yourself with what the market is doing now. Ask yourself where prices are in relation to the currenttrend. It is up to you to identify the type of trader you are (day trader, swingtrader, long-term trader) and the time frame in which you trade (minutes,days, weeks, . . .).For example, a day trader in the mini–stock index futures or the foreignexchange (forex) markets may only be working with a five-minute timeframe. In that case, she could care less what the market did last week oryesterday. A day trader may also want to focus on a 60-minute trend to decide whether she should hold the position for two or more periods. A swingtrader, who would hold a position for several days, may want to see what
I
77
78
CANDLESTICK AND PIVOT POINT TRADING TRIGGERS
the trend is doing from a weekly time perspective or from a time intervalbased on the past several days. Longer-term position traders may want toview the trend over several weeks or months. Cracking the code and understanding how to interpret what the market is telling you is what thisbook is about and what it will hopefully teach you.As a trader, you should recognize the immediate environment or market condition. Is it up, down, or sideways? After a trend is established,let’s say a bullish trend, it should consist of higher highs and higher lows. Itis usually a more fruitful situation to buy dips in that environment, as youwill you get more out of the trade in price magnitude than you will in selling the rallies. In a bullish environment, buying begets buying. Higher closing highs more importantly bring higher highs as momentum and assignedvalues are justified.
WHAT DEFINES MOMENTUM?The close is the assigned value for any market. The law of physics thatstates “a body in motion tends to stay in motion until a force or obstaclestops or changes that motion” really applies to this concept, because higherassigned values can and do usually attract more buying and even new buyers. That is what momentum is and why it is the