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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 11

Transforming Channels into Forecasts

IN THIS CHAPTER

Bullet Getting to know channel drawing

Bullet Discovering breakouts

Bullet Finding out about the regression channel

Bullet Estimating ranges with pivot point support and resistance

A straight-line trendline that extends into the future suggests where the price may go, but only in the general neighborhood. You expect future prices to cluster around a linear regression line, for example, but you don’t always know how to think about the outliers. It’s not realistic to try for a pinpoint forecast, but you can aim to draw a range of probable futures prices. Range refers to the high-low scope of prices over a number of periods, generally weeks and months.

In this chapter, I describe the straight-line channel and its forecasting capabilities. I show you how to build a straight-line channel forecast and outline how to interpret the information you see on the chart. I also talk about using pivot point analysis to draw horizontal support and resistance.

Diving into Channel-Drawing Basics

A channel is a pair of straight-line trendlines encasing a price ...

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Publisher Resources

ISBN: 9781119596554Purchase book