Trendlines

[tombrown1]

Well I've been doing much research and have learned that trendlines are the building blocks of technical analysis. I'm currently formulating a strategy that will trade growth stocks (preferably undervalued) according to trendlines.

What I've gathered so far is that you want to have a long-term trendline (4 years) a mid-term (1-2 years) and short term (3-6 months). Find the support and resistance and trade on big breakouts with support from volume.

I was at first nervous that I wasn't going to be able to afford the expensive software that allows you to easily draw trendlines with current and historical information (eSignal for example) - but then I realized that my broker, think or swim, has incredible software that does this for me!

So I guess I'm just writing to see if anybody has any experience or thoughts on this type of analysis.

Here's the basic strategy:
When a stock's price breaks above a resistance trendline you've drawn with a big volume bump - buy.

Depending on overall market conditions set a 5-10% trailing stop and ride it out.

From what I understand you will have more losers than winners, but the winners will be big, and the losers will have been stopped out with a small loss.

Thoughts?

[Gunnski]

Tom,

When you get your breakout. I suggest a confirmation, with volume, before you jump in. What I mean is a confirmation up candle the following day. Just to make sure it is a true breakout. I like your ideas alot! I use an ascending triangle breakout as one of my favorite patterns.

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The sky is the limit on the filters. There are hundreds of pre-definded filters all ready set up in the libaray.

StockFetcher.com - Stock Screening

[tombrown1]

Can you draw trendlines?