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Whenever the major averages are contending with key levels, it’s not uncommon to see some consolidation take place.  That happens of course in the indexes, but also in quite a few individual stocks (which take their cues from what “the market” is doing).

When defining those consolidation areas, I find it particularly helpful to designate the boundaries by drawing trend lines.  Those give me literal lines in the proverbial sand which, if crossed, I can identify as signals that price is back on the move.  I’ll use trend lines to initiate new trades, and stop out of existing trades (should price happen to reverse).

So here in Episode 54, I’ll explain my methods for drawing trend lines during consolidation phases and explain why I draw some trend lines horizontally and others on an angle.

(Be sure to click the full-screen option for best viewing.)

Hope you enjoy the show! Thanks for watching and subscribing, and feel free to post your ideas and comments down below.

Trade like a Bandit!

Jeff White
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www.TheStockBandit.net (Trading Blog)

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