Trend line drawing Price Targets and Technical Analysis that traders should know in the diagram Point-and-Figure

Trend line

In addition to the above, when using point-and-figure The trend line (trend line) at an angle of 45 degrees is also introduced to help determine the current trend. As well as being used as a filter (filter) in providing trading signals which trend lines have Here's how to draw a line:

In case of an uptrend, the trend line is called the bullish support line and is drawn at an angle of 45 degrees up to the right. Hand from the square below the end of the O symbol down one square as in the example picture. As long as the price stays above that line, the trend is still considered bullish.

Conversely, if the trend is downtrend, the trend line is called the bearish resistance line and is drawn at an angle of 45 degrees down to the right. From the box that is above the top of the X symbol up to 1 box as in the example picture As long as the price is below the downtrend line, the trend is still considered bearish.

Price Target

Although the above studies has led traders to various signals In buying or selling, but try to think that If a trader knows it's happening Where is the buy signal? Even if it is a point where short-term profits can begin to come out. Before changing direction, or if knowing that it gives a sell signal, where is it? Even if it's appropriate to enter the shopping spoon before the change of direction. One method which can Used to solve such problems is to set the price objectives (price objectives), which can be done in 2 ways:

1. Horizontal count The basic principle hidden behind this method is The time interval a stock takes to consolidate is important in determining its potential move. (consolidation) is therefore used to forecast price levels. To go up to test or vice versa Measuring the spread width (Distribution) is also used to forecast the price level. To be adapted to the test which the formula for finding goals In the event that the price is rising,

Hu = PL + (W X RV)

1. Hu = target price level

PL = The lowest price (from the symbol O) used as the basis for the calculation.

W = The number of columns used as the basis for the calculation.

RV = reversal value = (box size X the number of box)


2. The price level used as a base Must be able to point out clearly.

3. The column count or W value excludes the breakout column.

4. RV is the minimum reversal.

The formula used to find the target In the event that the price is declining,

Hd = target price level

PH = the highest price (from signal X) used as the basis for the calculation.

W = number of columns used as a basis for the calculation

RV = reversal value


2. Vertical count This method is quite simpler than the first method. Which formula is used to find price targets In case the price moves up, it is

Vup = minimum base price + (number of boxes in the first reversal X RV)

On the other hand, the formula used to find price targets If the price is falling,

Vdown = Highest base price - (number of boxes at first reversal X RV)

At this point, we hope that from the above-mentioned principles Whether it's about creating a diagram as well as the form that will be given buy or sell signal This technical analysis tool called Points and Figures should provide beginner traders with the right methods and strategies. To reduce the risk Before going into the market to trade seriously