/biz/ - Business & Finance

>>12319624

That's true but you are supposed to take in to account possible anomalies like that when drawing meme lines. There are two main schools of thought for trend lines in swing trading: 1. you must connect the peaks/bottoms precisely or 2. you take an average along the peaks/bottoms such that the line is more representative of the long term trend. #2 is by far the more popular for active swing and day traders.

It's important to understand that trend lines are understood to be a general thing for traders to identify to their own satisfaction that a trend is consistent or has broken down in some way such that the old trend line is now invalid. You change your trend lines on a regular basis to most closely reflect the actual price movement. Key support and resistance lines are the much more critical price levels to watch, in comparison to trend lines. Personally, I identify my trades initially based on trend lines, but my buy/sell orders are heavily weighted towards price behaviour around support/resistance lines.