The
basic trendline is one of the simplest technical
tools employed by the trader, and is also one
of the most valuable in any type of technical
trading.
For an up trendline to be drawn,
there must be at least two low points in the
graph where the 2nd low point is higher than
the first.
A price low is the lowest price
reached during a counter trend move.
Drawing Trendlines will help to determine when
a trend is changing
Trendlines show support boundaries under prices.
These boundaries may be used as buying areas.
Temporary trendline penetrations are not as
significant as a close beyond the trendline.
Trend Analysis and Timing
Markets don't move straight up
and down. The direction of any market at any
time is either Bullish (Up), Bearish (Down),
or Neutral (Sideways). Within those trends,
markets have countertrend (backing & filling)
movements. In a general sense "Markets
move in waves", and in order to make money,
a trader must catch the wave at the right time.
