Investment Lessons - Lesson 3 - Technical Analysis

Trendlines - Intermediate Concepts Part 2

In our first two lessons on trendlines, we learned that there are specific rules relating to trends, and that following those rules will give us a picture of the overall market trend.

We also spoke of the fact that there are trends of varying lengths of time.

In trendline analysis, there are three trends to be concerned with:

Primary trend which is also the long-term trend;

Intermediate trend;

Short-term trend.

Generally, these trends tend to follow the usual definition of the business cycle, which expands and contracts based on economic activity, interest rates and the whole of the economy.

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