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UPS AND DOWNS OF TRENDLINES
•TRENDLINE CONSTRUCTION
•EXTENDED TRENDLINES
•SIGNIFICANCE OF TRENDLINES
•TREND CHANNELS
•CORRECTIVE FAN PRINCIPLES
IN ORDER TO DRAW A PROPER TRENDLINE, IT IS NECESSARY TO HAVE2 REVERSAL POINTS TO CONNECT, OTHERWISE IT IS A LINE DRAWN INSPACE WITHOUT ANY TECHNICAL SIGNIFICANCE
A TRENDLINE REPRESENTS A DYNAMIC MOVING AREA OF SUPPORT AND RESISTANCE
A GOOD TRENDLINE REFLECTS THE UNDERLYING TREND IT TRIES TO MONITOR
AN OFTEN FORGOTTEN POINT CONCERNING TRENDLINES IS THE FACT THATONCE THEY HAVE BEEN PENETRATED, THEY REVERSE THEIR ROLE AS SUPPORT AND RESISTANCE LEVELS.
TRENDLINES OBTAIN THEIR SIGNIFICANSE FROM 3 FACTORS :
1. THEIR LENGTH
2. THE NUMBER OF TIMES THEY HAVE BEEN TOUCHED OR APPROACHED
3. THEIR ANGLE OF ASCEND OR DESCENT
OCCASIONALY, IT’S POSSIBLE TO CONSTRUCT ATRENDLINE THAT RUNS ROUGHLY PARALLEL TO THE BASIC TRENDLINE
RESISTANCE
SUPPORT
THE MOVE OUTSIDE OF THE CHANNEL DOES NOT HAVETHE SUFFICIENT POWER TO GO HIGHER…NOT A GOODSIGN !!!
Volume ?
THE FIRST RALLY IN A BULL MARKET IS USUALY EXPLOSIVE, SO THE RATE OF ASCENT OF THE PRICE IS USUALY UNSUSTAINBLY STEEP
…AND FINALLY A THIRD AND LAST TRENDLINE !!(LT-TREND)
THOSE 3 LINES REPRESENT THE PHASES OF A BULL MARKET