Markets fluctuate up and down in a succession of peaks and troughs. If the peaks are getting higher and higher, the trend is said to be up. Conversely, if the troughs are getting lower and lower, the trend is down. Sometimes, both of these trends are evident at the same time. This is a mixed trend and indicates a market trying to decide whether to continue the previous trend or establish a new one. A line can be drawn between successive peaks or troughs to graphically illustrate the trend. It takes two points to define a trend and a third to confirm. The top line is termed the line of resistance and the line connecting the troughs is termed the support line. Trends are most often broken down into three categories -- primary, secondary, and minor. Identifying the trend and the magnitude of the trend are the key to chart analysis.
Daily bar chart of Gold Futures showing primary, secondary, and minor trends.
Automatic, computer generated trend Lines created using Analyst from Trendsetter Software.
All of Trendsetter's software products can identify and draw trend lines on bar, candle or line charts. In the thirty plus years our products have been on the market, no other company, on any platform, has been able to duplicate this ability. It is the basis for our decision support system, available in Personal Hotline and HotlineX, which makes recommendations on where and when to buy, sell and place stop losses.
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