Technical Analysis
A Guide To Technical Analysis
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Line Charts
The line chart is the one most of us would have seen many times before and is usually plotted

Red Lines
When viewing most charts a pattern of the price formation is usually visible to the naked eye. This pattern is called a trend and these trends have three distinct patterns.

UP TREND:Prices increasing using closing price data. This chart is good for visualizing the overall trend of a stock and on some charting programs it will allow you to see more data over a longer time span

DOWNTREND:  Prices decreasing

A trend line is basically a line drawn joining consecutive lows or highs in a trend pattern.

Draw a line connecting the lowest points on a chart in an up trend.

Draw a line connecting the highest points on a chart in a down trend.

Support Line

When we draw a line joining all the lows of a price pattern together the line is called a Support Line. These lines are a low point on the chart on which the price bounces off consistently when reached. Many traders elect to BUY when the price reaches this point. It is our belief that the market likes to test Support lines more than once and we look for BUY signals after a second or third testing of this line.

If a support line is broken then the current trend is said to be broken or in a Down Trend and the market will look for a lower price to set up a new support level.

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