Archive for Chart Patterns
Chapter 7 – How to draw trend lines
Posted by: | CommentsThis is an excerpt from the Liberated Stock Trader Academy Book and Training Course. Chapter 7, Section 2.
Drawing trend lines is one of the most important skills of a technical analysts, trend lines represent important areas of support and resistance. Once you have this skill, charts come to life and start to signal their message to you.
Follow the four simple steps below to begin drawing your first trend lines.
TeleChart2007 chart courtesy of Worden Brothers, Inc.
Ticker:SOHU April 2009 Up Trends
- To evaluate an upward trend draw a line joining the highest highs
- For the floor of the uptrend draw a line connecting the lowest lows. The price here bounces 3 times off the bottom line but then proceeds higher.
- A trend line is drawn to show that price has moved strongly past the previous high this is a BUY Signal at $35.50.
- Finally the price is exhausted and falls through the bottom resistance line at $51. This break of the upward support line is a sell signal.
Quick Tip: The more bounces off a trend line the stronger the trend.
Head and Shoulders Pattern – Learn Stock Trading
Posted by: | CommentsWhat does a Head and Shoulder Pattern look like. The importance of the Head and Shoulders pattern should not be under-estimated. One of the most reliable patterns in technical analysis yet one of the most misunderstood.
Here we discuss the famous Head and Shoulders price pattern. Understood to be one of the most predictive & reliable of patterns the Head and Shoulders pattern has some unique characteristics. However you do need to know what you are looking for.
A Head & Shoulders Pattern has the following traits.
- two shoulders.
- a high point, the head, in between the shoulders.
- the volume should confirm the pattern. Read More→
