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** Quick Chart Lesson: Drawing Trendlines **

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ClayTrader Member Level  Friday, 09/28/07 11:23:41 PM
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** Quick Chart Lesson: Drawing Trendlines **

Along with support and resistance levels, trendlines are one of the most basic, yet important aspect of technical analysis.

Trendlines main uses are predicting future support/resistance areas, or alerting us as to "when" a breakout (or breakdown) has occurred... meaning, if the trendline is telling us a resistance level should be at point X, but when the price reaches point X, it goes right through, that would be known as a "breakout".

Trendlines are very easy to draw, but you must first understand support/resistances. The easiest way to think about drawing them is a "connect-the-dot" puzzle. Your dots are going to be the points of support/resistance, and when you connect the dots, BOOOOOM, you got yourself a trendline :)

Below are a few charts as examples. For more trendline information, check out the following link:http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:trend_lines

Questions or suggestions for more lessons? Please let me know!




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