Forex Questions and Answers - FXAnswer

Speed-lines are a method of trend analysis that considers different levels of price expectations as well as their pace. Also called 1/3 - 2/3 lines, speedlines are a series of trendlines that divide a price move into three equal sections. They can be used with equal validity on a variety of charts and across a wide range of time frames.

To calculate Speedlines, take a significant high-low price move and separate it into three equal parts on a vertical line. Then, draw lines from the low to intersect the vertical line at the 1/3 and 2/3 levels to produce three separate trendlines.

Source(s):

http://www.esignal.com/map/fxcm/offer/ speedlines.asp

Speed resistance lines are similar in interpretation to the Fibonacci Fan indicator. Many traders will watch for a move below the two-thirds level to signal a continued retracement toward the one-third level. It is important to remember that other technical indicators should be used when the price of the asset is near the trendline to confirm the strength of the predicted support/resistance.

Speed resistance lines used in FXTrade create a fan similar to the Fibonacci fan. However, rather than using Fibonacci numbers, the fan uses calculations by thirds. Many traders watch for a move below the two-thirds level as a signal of continued retracement toward the one-third level. Click the minimum and maximum points of an identifiable trend to create the reference line. Two other lines are drawn fanning out from this line at angles of 33.33% and 66.66%. These lines represent lines of possible price support on retracement. They may give insight not only to the degree of retracement but also the rate of retracement (hence the term "speed lines").

Support or resistance lines that divide the range of the trend into thirds on a vertical line. The two resulting speedlines are plotted by using as coordinates the origin and the 1/3 and 2/3 prices respectively.