The Trend Is Your Friend and so Are Trendlines
Michael N. Kahn, CMT
The old adage says, “The trend is your friend.” Why? It is because trends tend to perpetuate unless something causes them to do otherwise. If you can identify a trend in its early stages, you can ride that trend for significant profits. Trendlines mark the trend on the chart so it can be followed easily once it is identified.
Support and resistance lines are horizontal levels where prices stop falling and rising, respectively. Trendlines are simply the support and resistance lines on an angle. In a trading range, the market naturally rises and falls within that price range. When it reaches the range bottom, the price is low enough to discourage the bears from being ...