Trendline Trading

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Develop A Good Eye For Trendline Trading
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Let me first declare my love for trendline
trading, support and resistance. These essential
trading skills are being used every single day of
my trendline trading life and have provided me
numerous opportunities in trading. They also
require me to take years to develop the skill be
good and quick at drawing them.
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Important Analysis Through Trendline Trading
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The support, resistance and trendlines plotted
thrown together with the price chart will create
a huge amount of vital information waiting to be
extracted for detailed analysis. This requires
lots of time and effort. At the same time, the
analysis that is coming up contains subjective
elements.
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In the long run, a trader will be able to
identify and plot these levels easily. In order
to speed up the learning process it is always
good to compare the analysis done to the analysis
from software programs such as Autochartist or
any other charting software service as a guide.
This will greatly sharpen a traders observation
skills and techniques. The catch is to do the
analysis manually first before seeking automation
service from other sources.
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Concepts of Trendline Trading
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Two Concepts of Trendline Trading
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I have some tips for traders who wish to do it
manually and develop that good eye as a
foundation to trendline trading. In order to draw
really reliable trendlines or horizontal lines
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1. Work with market memory on the price
chart2. Note the number of contacts that a
trendline is making with the price
- Meaning that a trader should work on a time
frame where the market memory is not too long or
too short to plot his trendlines so that it is
still relevant to the current market.
- More contacts makes the line more significant
thus reflecting that the price is giving more
respect to the trendline that is being plotted.
That means the trendline is most likely a major
trendline, support or resistance.
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3. The spacing between contacts should have a
healthy spacing4. The proximity of the
trendline, support or resistance to the current
price
- This indicates a more impactful trendline that
is being plotted.
-Is the current price far from the trendline or
close to it? Whereby being closer might indicate
that the trendline might have some effect on the
current price near term.
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These are just some pointers that I have
observed and learned from through the years which
aids me in developing my foundation in plotting
trendlines, support and resistance.
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Perfect Trendline Trading with Practice
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Never rush to succeed the first few times if a
trader doesnt get it. Practice makes perfect and
with a good foundation in charting, I am sure
whatever strategies applied no matter how complex
it might be, a traders market analysis will
never go horribly wrong.
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