Before There Were Chart Patterns There Were Trend Lines

By Lawrence

Part of Art of Chart Reading

Chart patterns are combinations of price swings that exhibit consistency in their expected outcomes. Before the discovery of the various useful chart patterns, trend lines were the dominating technique for chart traders. The original trading techniques based on trend lines are forgotten by modern chart readers. These trading techniques are still very effective but people can no longer find comprehensive reference materials on the subject anymore.

In this article I am going to illustrate the basic usages of trend lines.


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Comments
  • mel November 7, 2013 at 7:04 pm

    Great article LC ! may I ask – I noticed that the accepted rate of change in long candles can sometimes be met with opposing candles of the same magnitude, what does this mean? The end result can vary as I sometimes see the accepted rate of change then a series of long candles to challenged the initia.

  • Lawrence Chan November 7, 2013 at 8:32 pm

    You need to provide actual examples so that it is easier to comment on.

    In general, I am talking about trend line here, not candle patterns though.

  • mel November 7, 2013 at 10:47 pm

    Ok, I lump both together, I think I get what you mean; as long as its contained under the trendline it should stay down until reversal happens.

    Anyway I posted a close sample, after the first trendline, a sudden bullish candle appears and this is almost the same magnitude as the bearish one prior to 0.

    http://tinypic.com/view.php?pic=2elcoy1&s=5#.UnxdTfcZ6Uk

    • Lawrence Chan November 11, 2013 at 10:04 am

      changed the tag you use so that the link can show

    • Lawrence Chan November 11, 2013 at 10:05 am

      The chart you posted does not have a down trend since the break of the first trend line.

      You are not reading your chart from left to right =P

      • mel November 12, 2013 at 12:34 am

        LOL

  • mel November 7, 2013 at 11:20 pm

    Test

  • wangsta215 May 17, 2014 at 11:22 pm

    Lawrence Chan

    The chart you posted does not have a down trend since the break of the first trend line.

    You are not reading your chart from left to right =P

    Hi LC,

    I recently signed up and have been absorbing every article. Good stuff here. I’m curious, why was the down trend broken after the first DTL as taken out? Is it related to the angle of the TL?

    Thanks

    W

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