Technical Analysis, Charts Drawings:
Quadrant Lines
Description
Quadrant Lines can be compared to Fibonacci Retracement, as well as to Tirone Lines by both the principle of drawing and the principles of interpretation. When Quadrant lines are drawn on stock charts, a user selects the trend-line that connects major top (resistance) and major bottom (support) levels. Then the vertical distance between marked support and resistance levels is divided into four equal parts by three horizontal lines which, together with the support and resistance horizontal lines, form the Quadrant lines.
In technical analysis, Quadrant lines are used in the same way as Fibonacci Retracements are used. Like Fibonacci Retracement, Quadrant lines have a middle line at the 50% level. The basic principle behind an analysis of the Quadrant lines is an assumption that, when the price moves close to one of the lines, the trend is considered to be vulnerable and predisposed to a change of its direction. Once the trend breaks one of the lines, the next sensitive level becomes the next line.
Chart 1: Quadrant Lines Chart
By V. K. for MarketVolume.com
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