How a Simple Line Can Improve Your Trading Success

Howdy,

Here’s the latest offering from EWI.  Now most of you know that I know the EWP (Elliott Wave Principle) but I don’t use it to trade from/with – I also don’t use or trade with/from Trendlines, BUT, I have read this report a long time ago and it does a great job of explaining how to trade using Trendlines.  As with most EWI relevant reports you have to sign up for FREE to Club EWI and then you can access all available free material.

If I don’t use Trendlines why publish this blog post?  I hear you ask – Well it’s simply something that you need to know and understand, whether you use them or not – In this business it pays to try to learn and understand as much as you can so you can discount what is not going to suit/work for you.

For those that are Fibonacci orientated this months Elliott Wave Theorist (EWT) dissects the market in TIME using Fib work – a great read and essential reading for committed traders and investors.

Click on the links below to access EWI’s site and the reports.

If anyone knows of any other publication outfits that provides FREE good quality material please feel free to let me know and I’ll have a look – although I am very very strict on what material/companies I’m prepared to promote on here

Enjoy

The HOVIS Trader

How a Simple Line Can Improve Your Trading Success Elliott Wave International’s Jeffrey Kennedy explains many ways to use this basic tool May 21, 2012

By Elliott Wave International

The following trading lesson has been adapted from Jeffrey Kennedy’s eBook, Trading the Line — 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. You can download the 14-page eBook here.

“How to draw a trendline” is one of the first things people learn when they study technical analysis. Typically, they quickly move on to more advanced topics and too often discard this simplest of all technical tools.

Yet you’d be amazed at the value a simple line can offer when you analyze a market. As Jeffrey Kennedy, editor of the new Elliott Wave Junctures service, puts it:

“A trendline represents the psychology of the market, specifically, the psychology between the bulls and the bears. If the trendline slopes upward, the bulls are in control. If the trendline slopes downward, the bears are in control. Moreover, the actual angle or slope of a trendline can determine whether or not the market is extremely optimistic or extremely pessimistic.”

In other words, a trendline can help you identify the market’s trend. Consider this example in the price chart of Google.

That one trendline — drawn between the lows in 2004 and the lows in 2005 — provided support for a number of retracements over the next two years.

That’s pretty basic. But there are many more ways to draw trendlines. When a market is in a correction, you can draw a trendline and then draw a parallel line: in turn, these two parallel lines can create a channel that often “contains” the corrective price action. When price breaks out of this channel, there’s a good chance the correction is over and the main trend has resumed. Here’s an example in a chart of Soybeans. Notice how the upper trendline provided support for the subsequent move.


For more free trading lessons on trendlines, download Jeffrey Kennedy’s free 14-page eBook, Trading the Line — 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. It explains the power of simple trendlines, how to draw them, and how to determine when the trend has actually changed.

Download your free eBook >>

This article was syndicated by Elliott Wave International and was originally published under the headline How a Simple Line Can Improve Your Trading Success. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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