Difference between a Trendline and Support/Resistance Lines?
- Thread starter Deezina07
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the angle of the dangle is inversely proportional to the heat of the meat, provided that the maxis of the axis, and the gravity of the cavity, remain constant.
Couldn't resist
Follow / listen to / obey Price - it the absolute arbiter
RN
Support and Resistance lines are usually horizontal. Trendlines are nonhorizontal lines representing the prevailing trend. When a trendline goes from trough to trough for an uptrend, it is considered to act as Support. When a trendline goes from peak to peak for a downtrend, it is considered to act as Resistance.
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Look at Trendlines and support and resistance on longer time frame charts, like 15m to 240m candles. Remember that overshoot is common, then it will find support or resistance on the following tests of that line.
All the books give neat examples, it is rarely that neat. Its an art not science. So you should anticipate the noise, how much should it overshoot, what should the follow up tests of the line look like? Stick to trading the longer term charts. When you go into day trading smaller intraday time frames, it is far easier for the bigs to manipulate the swings and for you to make mistakes. So stick to longer term charts.
If you are not willing to dedicate over 4 years full time to learn how to trade, then burn that book and get out now, while you still can.
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Price support and price resistance are labels for price levels that will very likely be supported or sold. These are places where a level will be defended; however, the defense may or may not succeed.
Some common levels that get defended are:
> Previous swing highs/swing lows in a range (previous swing highs/swing lows in a trend are likely to break to new highs/lows)
> Trend lines and channel lines
> Yesterday's close
> VWAP
> Moving averages (20- and 50-period MA's are most commonly defended; look at the rally of the S&P off the 50-day MA Monday)
> Breakout levels (price breaks out strongly and tends to pull back to the breakout zone)
Trend lines are one of many S/R levels. Trend lines and moving averages are mobile S/R; horizontal lines at key levels such as range extremes, daily open/close, VWAP, breakout levels, etc. are fixed S/R.
The problem many new traders have is believing so strongly that these levels will hold, they have no exit strategy to minimize loss.
they are just markers that everyone looks at,short term traders use these to take profits, open trades etc..they are also useful in determining strength of the fundamentals, when the market moves in a direction, the market meets and holds these levels or breaks ,going thru, this sometimes indicates a stronger fundamental shift in the underlying beliefs of the largest players,banks, govts , etc ...
I actually use moving averages to define trend. I don't draw trend lines. In real trading its better to use LL, LH, HH, and HH. Plus DB and DT. The double bottom and double top can also be referred to as support and resistance lines and yes they are horizontal lines.
If price has made BOTH a HH and HL then the trend is up no need to draw a trend line. Using an indicator that comes with some charting apps, you can have these auto created for you.
If price has made BOTH a HH and HL then the trend is up no need to draw a trend line. Using an indicator that comes with some charting apps, you can have these auto created for you.