Speed Resistance Lines
by Jayanthi Gopalakrishnan
Need to determine support and resistance? Try this.
It is not unusual to come across situations in which you see a market trending and think it may be too late to get in. To check, you wait for a pullback to determine if that might be a good entry point. But is this pullback a correction or a trend reversal?
Determining whether a trend is going to continue or
reverse is critical to a trader. Speed resistance lines, which were developed by technician Edson Gould, can help determine whether the market is correcting itself or a trend will reverse.These lines measure the speed of a trend by measuring the rate of ascent or descent. They are similar to Fibonacci fan lines, and you may have heard them also being referred to as one-third or two-thirds lines. Speed resistance lines are a hybrid of simple trendlines and Fibonacci retracement levels,
and they are helpful in creating support and resistance levels.