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Saturday, August 11, 2007 2:39:57 PM
** 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 occured... 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!
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 occured... 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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