You May See Only One Trend Line But There Are Many

By Lawrence

Part of Art of Chart Reading

Many chart readers rejecting the concept of trend lines because the drawing of trend lines is pretty arbitrary. Worse yet some technicians will sworn by their specific trend lines as if these lines have magical powers which control how the price will move around them. There is really no point to look at trend lines beyond their purpose – to highlight the persistency of the price direction currently in force. One has to be reasonable and objective when applying trend line analysis onto a chart.

A very important concept about trend lines is that there are often more than one trend line defining the exact same trend. In another words, even though you see that there is just this one obvious trend line in your chart, there are other versions of the same trend line used by people with slightly different configuration in their charts. You have to be aware of this possibility so that you will not fall into the trap of self deception.


Part of our premium service, login now or upgrade your membership to view this report

  • You must be logged in to comment. Log in