3 Simple Trend Line Rules | 27th July, 2017

by | Jul 27, 2017 | Education, Public Analysis, S&P500 | 3 comments

Trend lines used for support and resistance may have varying degrees of technical significance. Here are three simple rules to use to determine how much significance a trend line has and how much attention to pay to a breach.

Gold Daily 2017
Click chart to enlarge.

The stronger the line, the more important the breach.

Thus a line which is close to horizontal, very often tested, and very long held would be the most significant.

A line which is steep, only tested a very few times, and not long held offers very little technical significance.

On the monthly S&P500 chart, the green line has more technical significance than each of the yellow lines. The green line has a more shallow slope and is much longer held, although it has only been tested three times.

This analysis is published @ 05:08 a.m. EST.

3 Comments

  1. Joey Lancaster Lancaster on July 27, 2017 at 10:31 pm

    Great post! Thanks for sharing details behind the TA.

  2. Dreamer on July 27, 2017 at 5:22 am

    Good info. Thanks 😀

    • Lara on July 27, 2017 at 5:41 am

      You’re welcome.

      I’m learning that I make assumptions every day about how much my members do and do not know. Because this stuff is in my head everyday… I kinda assume you all know it too.

      And you know what they say about assumptions 🙂