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Questions and Answers
What is the primary implication of a trendline penetration?
What is the primary implication of a trendline penetration?
- A sideways trading range
- A continuation of the previous trend
- A reversal of the previous trend
- Either a reversal or continuation of the previous trend, depending on the context (correct)
What is the significance of a trendline penetration in a rising market?
What is the significance of a trendline penetration in a rising market?
- It is a rare event in a rising market
- It may occur at the time of, or just before, the successful completion of a reversal pattern (correct)
- It always signals a continuation of the upward trend
- It always signals a reversal to the downside
What is the relationship between a trendline penetration and a reversal pattern?
What is the relationship between a trendline penetration and a reversal pattern?
- A trendline penetration always follows a reversal pattern
- A trendline penetration always precedes a reversal pattern
- A trendline penetration is unrelated to a reversal pattern
- A trendline penetration can occur simultaneously with, or just after, the completion of a reversal pattern (correct)
What is the potential outcome of a trendline penetration, as shown in Figure 6.8?
What is the potential outcome of a trendline penetration, as shown in Figure 6.8?
What is the key to drawing trendlines, according to the text?
What is the key to drawing trendlines, according to the text?
What is the likelihood of a steep trend being broken compared to a more gradual one?
What is the likelihood of a steep trend being broken compared to a more gradual one?
What does the area between the trendlines and the parallel return lines represent?
What does the area between the trendlines and the parallel return lines represent?
What does the violation of the return line signify in a rising market?
What does the violation of the return line signify in a rising market?
What is the purpose of drawing lines parallel to the basic trendlines?
What is the purpose of drawing lines parallel to the basic trendlines?
What happens when a steep trend is eventually broken?
What happens when a steep trend is eventually broken?
What is the primary purpose of constructing a trendline in technical analysis?
What is the primary purpose of constructing a trendline in technical analysis?
When is it necessary to redraw an up trendline?
When is it necessary to redraw an up trendline?
What type of trendline is constructed by joining a series of identical highs?
What type of trendline is constructed by joining a series of identical highs?
What is the term for the process of connecting the final peak with the top of the first rally in a downtrend?
What is the term for the process of connecting the final peak with the top of the first rally in a downtrend?
What is the key characteristic of a true trendline?
What is the key characteristic of a true trendline?
What happens when a trendline is violated with a sharp angle of ascent or descent?
What happens when a trendline is violated with a sharp angle of ascent or descent?
What is shown in Figure 6.13?
What is shown in Figure 6.13?
What is the main difference between arithmetic and logarithmic scales?
What is the main difference between arithmetic and logarithmic scales?
What is the significance of the angle of ascent or descent in a trendline violation?
What is the significance of the angle of ascent or descent in a trendline violation?
What is shown in Figure 6.14?
What is shown in Figure 6.14?
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