3 Simple Trend Line Rules | 27th July, 2017

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 thoughts on “3 Simple Trend Line Rules | 27th July, 2017

    1. 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 🙂

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