Trendline Supporting the Price Movement.pdf

Trendline Supporting the Price Movement

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Synopsis E-book: Trendline Supporting the Price Movement

An important concept in technical analysis is the determination of the trend of the market. In last month’s technical analysis article titled ‘Determining the Direction and Strength of a Trend’, we have looked into how to determine the direction and strength of the trend using an indicator called ADX. This article will further elaborate on this important facet of classical technical analysis with a detailed study of trendlines.

In addition to helping to identify the prevailing trend, trendlines offer clear indicative support and resistance levels to the price movement. As a trader or investor, identifying those levels of support and resistance are key ingredients to successful trading. A support level is a price level that has strong buying strength that can absorb all the selling strength leading to an arrest to further declines in price. On the other hand, a resistance level is a price level where sellers are so abundant that it prevents further increase in price. For an effective trading strategy, such support and resistance levels must be determined. This article will discuss the construction of trendlines, use of trendline in support and resistance analysis, and extended trendlines


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  • FileName: Trendline Supporting the Price Movement
  • Author: Ng Ee Hwa
  • Language: English
  • Size: 458 KB | Remove!

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  • FileType: .pdf
  • Dir.: Part9
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