To complete our discussion on lines for the moment, you should know that some analysts develop a good eye for drawing internal trendlines. These are not like regular trendlines, which can be drawn by anyone following the simple...

Yet another way to draw lines on a chart which may prove to be useful, speedlines is a technique developed by Gould. It uses one-third and two-thirds as ratios again, but in this case the fractions are not applied to the...

Time to talk some more about price targets. It’s obviously useful if you have an idea in mind about how far the price is going to go on a retracement before resuming a trend. The retracement is a countertrend movement...

Drawing two lines upon a chart across past highs and lows can help you decide your next trade. This is another idea that develops out of the trendline concept and is referred to as the channel line, sometimes called the return...

The Trendline Fan To elaborate further on the use of the trendline, sometimes it is possible to draw several trend lines creating the appearance of a fan. When the first trendline has been violated, and in an uptrend has become a...

Breaking the Line Nothing lasts for ever, so if you have a valid trendline and the price violates it, breaking through, this can provide the first sign that the trend is changing. Here’s an uptrend where the trendline has...

Strength of the Line Just as with support and resistance, there are various ways that you can gauge how “strong” the line is, or in other words how likely it is to hold up in the future. Once again, as with support...

The reason that support and resistance work, and that the price will keep on touching and rebounding off them, is down to the psychology of the market participants. There is no ‘magic’, just commonsense. One...