Student’s Question:On the charts I notice that trendlines can have various types of “slopes” associated with them. What kind of information can be gained by looking at the slope…if any. Thanks.Instructor’s Response:You are correct…the slopes can provide insight. Take a look at the example chart below…
As you might suspect, anything that goes up (or down) quite dramatically can reverse itself in much the same rapid manner. Notice the steepest slope on the chart below. Rising as quickly as it does, it will not be able to sustain itself over the longer term and will decline, on average, more quickly than either of the other two.Ideally, as with many things, a slow steady building process is the key to longer gains and, potentially, those that are more likely to be sustained over time.
To learn more about trends and how to employ them in your trading, click on the link below and go to Trading Course…
https://plus.dailyfx.com/tnews/index.jsp?ib=fxcm&lang=en
Live account holders can log into the Daily FX course using their live account number and password. Once there, click on Trend Trading and you can access four complete lessons on the concept of trading in the direction of the trend.
