Basic Techniques  |  MAR 2000

Trendline Basics by Martin Pring

Trendline Basics by Martin Pring The trend of prices is the feature that is most sought after in technical analysis, yet surprisingly simple constructs can get you right with the market. Here, veteran trader and analyst Martin Pring takes you through the basics of creating and interpreting trendlines. Trendlines are a simple but highly effective tool. In technical analysis, we assume prices move in trends, and that once begun, a trend continues. Therefore, you, as a technician, must be concerned with identifying a price reversal at an early stage and riding it until the evidence proves the trend has once again turned. Trendlines represent one of these items of evidence. Trendlines are not perfect tools, but then, what technical indicators are? In my experience, however,they can be highly effective. If I had to be cast off on a deserted island with only two or three technical indicators, I would not hesitate to take trendlines along.

by Martin J. Pring