Speed Resistance Lines

Speed Resistance Lines ("SRL"), sometimes called 1/3-2/3 lines, are a series of trendlines that divide a price move into three equal sections. They are similar in construction and interpretation to Fibonacci Fan Lines.

Speed Resistance Lines display three trendlines. The slope of each line defines a different rate at which pricing expectations are changing.

Prices should find support above the 2/3 line. When prices do fall below the 2/3 line, they should quickly drop to the 1/3 line where they should then again find support.

To draw Speed Resistance Lines:

  1. Draw a line from a major low to a major high.
  2. Draw a vertical line on the day the major high occurred. Divide this vertical line into thirds.
  3. Draw lines from the major low so they intersect the vertical line at the 1/3 and 2/3 levels.

These lines are depicted in the foolowing chart:

SRL.gif (6774 bytes)

Because this is an interactive drawing feature, the user normally create the lines by selecting the first extreme point and then dragging the mouse to the other extreme point. When the mouse is released, Chart FX FE will make all the necessary calculations and draw the lines. Please note. it is not necessary that the user clicks on a specific data point as the SR lines will be calculated according to the axis scale and the position the mouse was released.