{"id":34309,"date":"2011-11-17T19:58:52","date_gmt":"2011-11-17T14:28:52","guid":{"rendered":"index.php\/2011\/11\/17\/technical-analysis-of-the-financial-markets-ch-4-2\/"},"modified":"2011-11-17T19:58:52","modified_gmt":"2011-11-17T14:28:52","slug":"technical-analysis-of-the-financial-markets-ch-4-2","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2011\/11\/17\/technical-analysis-of-the-financial-markets-ch-4-2\/","title":{"rendered":"Technical Analysis of the Financial Markets: Ch 4"},"content":{"rendered":"<div style=\"margin: 1em;width: 114px;float: left;height: 170px\" class=\"zemanta-img\"><a href=\"http:\/\/www.amazon.com\/Technical-Analysis-Financial-Markets-Comprehensive\/dp\/0735200661%3FSubscriptionId%3D0G81C5DAZ03ZR9WH9X82%26tag%3Dzem-20%26linkCode%3Dxm2%26camp%3D2025%26creative%3D165953%26creativeASIN%3D0735200661\"><img loading=\"lazy\" decoding=\"async\" style=\"border-bottom: medium none;border-left: medium none;border-top: medium none;border-right: medium none\" alt=\"Cover of &quot;Technical Analysis of the Finan...\" src=\"http:\/\/ecx.images-amazon.com\/images\/I\/51HXxOoxN0L._SL300_.jpg\" width=\"101\" height=\"136\"><\/a> <\/p>\n<p style=\"font-size: 0.8em\" class=\"zemanta-img-attribution\"><a href=\"http:\/\/www.amazon.com\/Technical-Analysis-Financial-Markets-Comprehensive\/dp\/0735200661%3FSubscriptionId%3D0G81C5DAZ03ZR9WH9X82%26tag%3Dzem-20%26linkCode%3Dxm2%26camp%3D2025%26creative%3D165953%26creativeASIN%3D0735200661\">Cover via Amazon<\/a><\/p>\n<\/div>\n<p><em>Continuation of the review of the 4th chapter of John J. Murphy\u2019s Technical Analysis of the Financial Markets (<a href=\"http:\/\/stockviz.biz\/index.php\/2011\/11\/16\/technical-analysis-of-the-financial-markets-ch-4\/\">prev<\/a>.)<\/em><\/p>\n<h3>Trendlines<\/h3>\n<p><a href=\"http:\/\/stockviz.biz\/wp-content\/uploads\/2011\/11\/image5.png\"><img loading=\"lazy\" decoding=\"async\" style=\"border-right-width: 0px;margin: 2px 20px 5px 0px;padding-left: 0px;padding-right: 0px;float: right;border-top-width: 0px;border-bottom-width: 0px;border-left-width: 0px;padding-top: 0px\" border=\"0\" alt=\"image\" align=\"right\" src=\"http:\/\/stockviz.biz\/wp-content\/uploads\/2011\/11\/image_thumb5.png\" width=\"238\" height=\"176\"><\/a>The simplest trendlines are the <em>up trendline: <\/em>a straight line drawn upward along successive reaction lows. A tentative trendline is initially drawn under the first two consecutively higher lows (points 1 &amp; 3) and then confirmed at the 3rd test (ponit 5). A <em>down trendline <\/em>is similarly constructed over consecutively lower rally highs.<\/p>\n<p>To draw a trendline: <\/p>\n<ul>\n<li>The peak at <strong>2<\/strong> should be penetrated\n<li>50% retracement of wave <strong>2-3<\/strong>\n<li>Prices approach the top of <strong>2<\/strong>\n<li>Confirmed once prices bounce off the line the third time (point <strong>5<\/strong>)<\/li>\n<\/ul>\n<p>As long as the trendlines are not violated, it can be used as buying and selling areas. A <em>violation<\/em>, however, is one of the best early warning of a change in trend. The <strong>longer<\/strong> the trend and the number of times it has been <strong>tested<\/strong>, the more its <strong>importance<\/strong>. Once a reversal occurs, what was once an <em>up trendline<\/em>, now acts as a <em>resistance<\/em> barrier for subsequent rallies. And what was once a <em>down trendline<\/em>, acts as <em>support<\/em>.<\/p>\n<p><em>Up Next: The Fan Principle<\/em><\/p>\n<div style=\"margin-top: 10px;height: 15px\" class=\"zemanta-pixie\"><img decoding=\"async\" style=\"border-bottom-style: none;border-left-style: none;border-top-style: none;float: right;border-right-style: none\" class=\"zemanta-pixie-img\" alt=\"\" src=\"http:\/\/img.zemanta.com\/pixy.gif?x-id=a569c0f7-c967-4c87-89a8-febae30a591d\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Cover via Amazon Continuation of the review of the 4th chapter of John J. Murphy\u2019s Technical Analysis of the Financial Markets (prev.) Trendlines The simplest trendlines are the up trendline: a straight line drawn upward along successive reaction lows. A tentative trendline is initially drawn under the first two consecutively higher lows (points 1 &amp; &hellip; <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[804],"class_list":["post-34309","post","type-post","status-publish","format-standard","hentry","category-your-money","tag-reading","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/34309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=34309"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/34309\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=34309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=34309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=34309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}