Back to Basics! (AAPL)
Richard O. Zamora, III; CMT • Oct 16, 2018
Trendlines - The Basic Principal of Technical Analysis
The basic tenet of Technical Analysis is the trend. The objective of Traders is to: 1. Recognize the beginning stages of a trend. 2. Take a position in its direction. 3. Hold the position until the trend begins to wane. 4. Exit the position for a profit.
Easier said than done.
The belief that Markets trend is the reason why traders do what they do; but the HOW is what I wanted to discuss today. How can you take this assumption and act upon it? HOW can you make this fundamental principle an easier process in your trading analysis?
Looking at Apple’s (AAPL) chart offers some clues AND a concrete demonstration.
The first observation is that we notice a price high on October 3rd (Clue #1), followed by a series of descending lower lows and lower highs as of October 16th (Clue #2). Next, draw a line that connects the price high - downward - to the price high of the most recent candlestick, this is a Downward Trendline (Concrete Demonstration).
Does this line and do these price events make a trend? Maybe. But one thing is certain: You now have a basis and a beginning working analysis that you did not have! The next question is: How do you trade it? I can help you answer that through consultation; contact me today!
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