The Trendline by Angle tool

A Wealth of Knowledge

Revision as of 10:00, 24 October 2017 by Yonela Ngulugulu (talk | contribs)
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The truth is, having more information gives one an edge! Traders use different tools to measure the speed at which the market is moving, others use moving averages, others use the Bollinger Bands. Other traders then use trendlines. Did you know that as a trader you can determine if whether or a not a trend is a strong trend or a weak one by just looking at the slope of the trendline itself being that the steeper it is the strong and the faster is the trend that the price is moving in?? However, one downside to this is that one is simply generalizing, by simply looking at the slope of the trendline itself. But what if one can calculate the angle in which the trendline is drawn and therefore deduce from there if whether or not the current move is a very strong one or a very weak one? The trendline by angle tool simply measures the degree to which the line differs from the horizon. being that if the trendline is set to 0 degrees Celsius, then that is nothing but a horizontal line. Therefore, not really a trending market. Say the angle at which the trendline is drawn is 90 degrees. Then this is nothing but a vertical line. Trendlines vary in degree which then informs one of the speed of the trend.

For instance, if the trendline angle is above 45 degrees then the trend said to be too fast or too steep and as such it will at some point correct to a much feasible and sustainable angle. The most viable trendlines are those which vary from 30 to 45 degrees. This angle is sustainable and the trend itself is likely to last longer. A trendline that is below 30 degrees in angle then it is too slow, or too flat and is most likely to correct to a more sustainable angle between 30 and 45 degrees. So the trendline by angle tells us if the prices went too far too quick, and that the market has to retrace the move eventually. Think about it, the price does not move in straight line. Meaning to say, if the prices drop then they will not drop in a single file line. The markets innately move in waves/zigzags, therefore if the market makes a strong upward/downward move then one should expect a retracement. One will come to notice that the stronger the initial move then the stronger the retracement of that move.