Speed resistance lines
Two lines from a swing low that split the move up to a later high into thirds, so you can see how fast price is rising.
What it shows
Speed resistance lines connect a swing low to points one third and two thirds of the way up to a later swing high. The lines are extended to the right.
They show price speed. If price stays above the upper line the rise is fast. If it falls to the lower line the rise has slowed. A close below the lower line means the speed has gone.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Pick a swing low and the next swing high.
- Mark points at one third and two thirds of the vertical distance, at the swing high's time.
- Draw lines from the swing low through each point.
- Extend the lines to the right.
Starting values: Divisions 1/3 and 2/3; Anchors most recent swing low and following swing high. These are proposed and will be tuned on real price data before launch.
How to read it
- The upper line is the 2/3 line and the lower line is the 1/3 line.
- Price between the lines is rising at a medium speed.
- Price above the 2/3 line is rising fast.
Status labels you may see
| Label | What it means |
|---|---|
| Above the 2/3 line | Price is rising faster than two thirds of the earlier move. |
| Between the lines | Medium speed. |
| Below the 1/3 line | Speed has dropped below one third. |
What cancels it
A close below the 1/3 line.
What traders check next
- Whether price stays above the 1/3 line after a pullback.
- Whether the line has been touched more than once.
- How steep the 2/3 line is compared with an ordinary uptrend line.
Limits
- It depends on one swing low and one swing high.
- The thirds are a convention.
- Price may ignore the lines completely.
Try it in forecastviz
- Open any ticker and choose Trendlines and channels → Speed resistance lines in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Trendline fan and Gann fan on the same chart.
Questions
What is the point of using thirds?
Thirds give a simple way to say fast, medium or slow.
Is it the same as a fan?
Similar idea, different ratios. A fan uses Fibonacci ratios, speed lines use thirds.
Related trends
Further reading
- Murphy, Technical Analysis of the Financial Markets
- Edwards and Magee, Technical Analysis of Stock Trends
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.