"So many market commentators are egotistical dramatists. The thoughtful, honest approach you and Eoin share is a great contrast that I appreciate. Thanks.

"Colin Twiggs included an article on Momentum Trading by Bruce Vanstone of Bond University in Australia. The article is some of the clearest, most practical work I have seen from an academic. Just today I was telling someone how I am reluctant to buy breakouts, preferring to buy on setbacks. Yet the momentum trade has a strong record of generating profits from the point of breakouts. Hmm."

David Fuller's view Thank you, and I am not just returning the compliment in saying that you adopt a similar approach in your own research. With your background and interest in psychology, you understand that braggadocio is either a cover for insecurity or a short-term sales tactic. Our industry certainly has its share of hard-sell merchants. Obviously that can be financially rewarding because most people can be bamboozled at least once, but the turnover of subscribers will be high. However in this industry or any other endeavour, if you help people, they keep coming back.

As for momentum trading versus buying on pullbacks, they are complementary rather than mutually exclusive. Successful momentum trading requires a persistent trend for best results. However buying on pullbacks to an appropriate moving average mean, as shown in the illustration for the article above, will be at least as successful. Momentum trading will help one to get out and reverse positions when the uptrend eventually loses momentum beyond a brief pause or consolidation, but those who like to buy on pullbacks should also reconsider tactics when the progression of higher reaction lows is broken. Momentum trading will too often lead to whipsaws in a broad trading range, but buying on pullbacks should be more profitable in a sideways band.

Temperamentally, I prefer to buy on pullbacks, such as we recently had towards the rising medium-term trends, defined by 200-day MAs. However in my own trading and investing I often buy on breakouts because they are more easily recognised opportunities, provided the breakouts are maintained. A lot depends on the pattern. With my most recent stock market trade - Siemens AG (SIE GY) (weekly & daily), I preferred to anticipate the breakout because stock markets were steady in a lengthy consolidation, representing the first step above the base formation. Eoin and I have often mentioned, not least at The Chart Seminar, that the first step above the base is one of the most reliable continuation patterns. Conversely, as is the first step below a top, as you can also see on the weekly chart for Siemens.