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Technical Analysis For Dummies, 4th Edition
book

Technical Analysis For Dummies, 4th Edition

by Barbara Rockefeller
October 2019
Beginner content levelBeginner
384 pages
10h 46m
English
For Dummies
Content preview from Technical Analysis For Dummies, 4th Edition

Chapter 10

Drawing Trendlines

IN THIS CHAPTER

Bullet Connecting the dots

Bullet Knowing how to draw support and resistance lines

Bullet Judging breakouts of support and resistance

Bullet Acquainting yourself with internal trendlines

The human brain instinctively seeks order and creates meaning from patterns. When looking at a chart of a security, you may think you see a pattern of directionality — trendedness — but is it really there? Or are you seeing a pattern when randomness is all there is?

To be sure, you need to connect the dots by drawing a visible line along what you think is the trend. A trendline is a straight line that starts at the beginning of the trend and stops at the end of the trend. Today everyone uses software to draw trendlines, but note that you have to do the drawing; websites and charting software won’t do it for you.

In this chapter, I cover support and resistance, two of the most important concepts in technical analysis, and also the linear regression, which depicts pure, true trend.

Looking Closely at a Price Chart

When you take your pencil (or cursor) to draw a line, sometimes ...

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Technical Analysis For Dummies

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Publisher Resources

ISBN: 9781119596554Purchase book