Technical Analysis VIII: Price Channels
A trending market can move between parallel support and resistance levels. A price channel between two parallel lines can often be drawn in a trending market. The key to a price channel is that the lines be parallel to each other. The value of the price channel in predicting the ongoing [...]
Technical Analysis VII: Trading the Trend Lines
Only one of two things can happen when a price approaches support or resistance: the price can break through it, or it can bounce off and reverse direction. The same is of course true for trend lines.
1. Trading on a Pullback
If a chart is trending in a clear direction, [...]
Technical Analysis VI: Trend Lines
What are Trend lines?
Trend lines are lines drawn on the historical price levels that depict general direction of where the marking is heading, and provide indications of support or resistance.
Drawing trend lines is a highly subjective matter. The best test of whether a trend line is a valid one is usually [...]
Technical Analysis V: Trending and Ranging Markets
In Trending Markets
The existence of a trend in any market depends on a series of relative highs and lows. Two consecutive relative highs, each above the previous relative high, and two relative lows above the previous low would be constitute a tentative up-trend. A third relative high would [...]
Technical Analysis IV: Identify the Market Trend
Three Phases of Major Trends
A trend represents a general direction of the market. Dow Theory asserts that major trends have three distinct phases: accumulation, public participation and distribution. The accumulation phase represents the first part of the trend in which those who are well-informed buy or sell. In other [...]