Draw a Best Fit Trend Line

You can use the Best Fit Trend line to option to draw a trend line whose points reflect an average of the selected time range. Click here for the formula used to calculate the position of the Best Fit trend line.

Trend lines can be used to mark the strength of price action for a security over a period of time. These strength areas are known as "resistance" at the top end of the range of trading, and "support" at the bottom end of the trading range. These trading ranges can develop over short or long periods of time, depending on the fluidity of the stock.

NOTE: You can also create the following types of trend lines:

• Standard trend lines

• Snap to Price trend lines

You can draw trend lines on the Chart window to mark high and low points, thus dividing the chart into Support and Resistance zones. These zones can be used to determine entry and exit points in the market.

• Resistance  - The price a stock can trade at, but cannot exceed, for a certain period of time.

• Support - The price stock trades at, but does not go lower than, for a certain period of time.

NOTE: To draw a trend line in the Chart window, you must display the Chart toolbar. To display the Chart toolbar, right-click the Chart window and select Show Toolbar from the Chart window pop-up menu. Click here for more information.

Perform the following to create a snap to price trend line:

1. From the Chart toolbar, click
   NOTE: If you do not see this button, you need to display the Chart toolbar.

2. Place the cursor over the position you want the trend line to begin.

3. Click and hold down the mouse button

4. Place the cursor over the final trading day the trend line should include.
   NOTE: The begin point of the trend line may change position based on the current end position to reflect an average of the begin and end points of the trend line..

5. Release the mouse button. The new trend line appears on the chart.