The second line, which is known as the 1/3 line, is then drawn from the low price to the price point that represents a one-third retracement from the high toward the low. The first line in an uptrend is drawn from the low price point, or start, of the uptrend to the most recent high price reached in the trend. How to Draw Speed LinesĪlthough you can simply apply a speed lines indicator to a chart, speed lines are also easy to draw yourself. Each of the three lines that comprise this indicator shows possible support (in an uptrend) or resistance (in a downtrend) levels that may serve as future turning points for a security’s price. Speed lines are what is known as a fan tool – one that reveals multiple potential support or resistance trend line levels – similar to the Fibonacci fan or Gann fan. They are sometimes referred to as “speed resistance lines,” however, that moniker is somewhat misleading since the lines are designed to represent both support and resistance levels. The technical analysis tool of speed lines was developed by Edson Gould, a technical analyst who became quite well-known for making several accurate stock market calls during the 1960s and 1970s.
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