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How to Use Trendlines to Spot Reversals and Ride Trends
Jeff Kennedy shares a simple, effective tool to anticipate market direction.

By Jill Noble
Tue, 29 Nov 2011 16:45:00 ET
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When markets rise and fall as sharply as we've seen in recent months, wouldn't it be great to know if it's time to jump aboard a trend, OR to jump off because the ride is nearly over?

Veteran Elliottician and "Trader's Classroom" instructor Jeffrey Kennedy knows some simple techniques to help you do just that. With no end in sight to market volatility, learning how to apply simple trendline techniques to your trading may be the best decision you make all year. 

If you're new to trendlines, consider this excerpt from Jeff's thorough introduction in his online, on-demand e-course, "Trading the Line" (learn more here>>):

What is a trendline?
Well, a line simply connects two points (a first point, and a second point) Now, within the scope of technical analysis, these points are typically price highs or price lows: these are trendlines. 

Before I continue much further, something that I will repeat quite often is that
“the significance of the trendline is directionally proportional to the importance of points one and two.” That’s something to remember when drawing trendlines.

What does a trendline represent?
It actually represents the psychology of the market – specifically, the psychology between the bulls and the bears. If you have an upward sloping trendline it lets you know that the bulls are in control. If you have a downward sloping trendline, it lets you know 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 pessimistic.

What types of trendlines can you draw?
Here’s the fun part: You can draw trendlines a number of different ways… there’s really not a wrong way to draw trendlines.
 
If you draw them along the vertical axis, you’re analyzing time (you primarily draw trendlines in this manner if you’re doing cycle analysis). If you draw them on a horizontal axis, you’re analyzing price (to identify resistance and support). And, if you draw them at an angle, you’re actually analyzing both price and time.

With this foundation in place, Jeff's 90-minute lesson goes on to show you several methods to draw your own trendlines -- and to determine market trends.

Kennedy covers trade setups, how to integrate the Wave Principle and trendlines, and his very own “Kennedy Channeling technique” in a way that's easy-to-understand for the novice trader. He uses real-world charts, plus more than 150 step-by-step illustrations. What's more, since this course is online, you have instant-replay built right in – so you can pause and rewind as often as you like, starting right now!

Don’t wait until the New Year to start improving your trading skills -- let Jeff teach you how to use trendlines, and boost your decision-making confidence with technical analysis TODAY>>

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