Trading with the Trend lines

From : http://www.investorsdepot.com/chartreading101.htm


TRENDLINES

	Trendlines - Inclining Trendline A straight line usually drawn to define an uptrend against or through price bar lows.
	Trendlines - Declining Trendline A straight line usually drawn to define a downtrend against or through price bar highs.
	Support A horizontal line (floor) which has acted as a barrier to lower prices. Usually defined by two or more price bar lows.
	Resistance A horizontal line (ceiling) which has acted as a barrier to higher prices. Usually defined by two or more price bar highs.
	Channel-Inclining An up-trending price bar pattern in which inclining parallel lines can be drawn through or against price bar highs and lows respectively.
	Channel-Declining A down-trending price bar pattern in which declining parallel lines can be drawn through or against price bar highs and lows respectively.
	Channel-Horizontal or Sideways A horizontal or "sideways" price bar pattern in which horizontal parallel lines can be drawn through or against price bar highs and lows respectively. Chartists frequently "buy" or (go-long) on a break up and out of the Channel or "sell" (go-short) on a break down and out of the Channel.

TRIANGLES

Symmetrical	Triangles-Symmetrical A price bar pattern in which the slope of price bar highs and lows are converging to a point so as to outline the pattern in a symmetrical triangle. Chartists frequently "buy" or (go-long) on a break up and out of the Symmetrical Triangle or "sell" (go-short) on a break down and out of the Symmetrical Triangle.
Ascending	Ascending Triangle A price bar pattern in which the slope of price bar highs and lows are converging to a point so as to outline the pattern in Right Triangle. The hypotenuse in an Ascending Triangle should be sloping from lower to higher and from left to right. Chartists frequently buy or (go-long) on a break up and out of the Ascending Triangle or sell (go-short) on a break down and out of the Ascending Triangle. However, Ascending Triangles are generally thought to demonstrate a stronger bias towards predicting a break up and out of the Triangle, particularly when the trend leading up to the formation has been up.
Descending	Descending Triangle A price bar pattern in which the slope of price bar highs and lows are converging to a point so as to outline the pattern in Right Triangle. The hypotenuse in an Descending Triangle should be sloping from higher to lower and left to right. Chartists frequently buy or (go-long) on a break up and out of the Descending Triangle or sell (go-short) on a break down and out of the Ascending Triangle. However, Descending Triangle are generally thought to demonstrate a stronger bias towards predicting a break down and out of the Triangle, particularly when the trend leading to the formation has been down.

Non-Symmetrical


A price bar pattern

in which the slope of price bar highs and lows are converging to

a point so as to outline the pattern in a non-symmetrical

triangle. Chartists frequently "buy" or (go-long) on a

break up and out of the Non-Symmetrical Triangle or

"sell"

(go-short) on a break down and out of the Non-Symmetrical

Triangle.

PENNANTS


Pennants


Similar to a

Symmetrical Triangle but generally "stubbier" or not

as elongated. A price bar pattern in which the slope of price

bar highs and lows are converging to a point so as to outline

the pattern in a symmetrical triangle. Chartists frequently

"buy" or (go-long) on a break up and out of the

Pennant or "sell" (go-short) on a break down and out

of the Pennant.










WEDGES

& FLAGS

Rising/Inclining		Wedges-Rising or Inclining A price bar pattern in which the slope of price bar highs and lows are converging to a point so as to outline the pattern in a triangle that points diagonally higher. The slope of both converging lines is up, the lower one being steeper than the higher one. Chartists frequently buy or (go-long) on a break up and out of the Wedge or sell (go-short) on a break down and out of the Wedge. Rising Wedges, in the context of a prior downtrend are generally considered to have a stronger bias toward breaking down and out, as opposed to up and out.
Falling/Declining		Wedges-Falling or Declining A price bar pattern in which the slope of price bar highs and lows are converging to a point so as to outline the pattern in a triangle that points diagonally lower. The slope of both converging lines is down, the higher one being steeper than the lower one. Chartists frequently buy or (go-long) on a break up and out of the Wedge or sell (go-short) on a break down and out of the Wedge. Falling Wedges, in the context of a prior uptrend, are generally considered to have a stronger bias toward breaking up and out, as opposed to down and out.
Bull Flag		Bull Flag A price bar pattern consisting of a relatively small number of price bars in which the slope of price bar highs and lows are parallel and declining, or in which the slopes converge to a point in the shape of a small Pennant. Bull Flags are identified by their characteristic pattern and by the context of the prior trend. In the case of a Bull Flag the trend leading to the formation of the Bull Flag is up. Chartists frequently "buy" or (go-long) on a break up and out of a Bull Flag formation. Bull Flags are generally considered to have a stronger bias toward breaking "up and out," as opposed to "down and out."
Bear Flag		Bear Flag A price bar pattern consisting of a relatively small number of price bars in which the slope of price bar highs and lows are parallel and inclining, or in which the slopes converge to a point in the shape of a small Pennant. Bear Flags are identified by their characteristic pattern and by the context of the prior trend. In the case of a Bear Flag the trend leading to the formation of the Bear Flag is down. Chartists frequently "sell" or (go-short) on a break down and out of a Bear Flag formation. Bear Flags are generally considered to have a stronger bias toward breaking "down and out," as opposed to "up and out."

TOP/BOTTOM

FORMATIONS






TOP/BOTTOM

FORMATIONS II

Head And

Shoulders

Anticipates a decline on a break below the "Neckline."





Inverted Head and

Shoulders

Anticipates a rise in prices on a break above the

"Neckline."

Rounded Top Anticipates a change in trend from up to down.	Rounded Bottom Anticipates a change in trend from down to up.