A trend line is a line drawn over or under pivot highs or lows to represent the current price direction. In every time frame, trend lines offer a visual representation of support and resistance. They depict price direction and speed, as well as patterns during moments of price contraction.
A trend line is a line drawn over or under pivot highs or lows to represent the current price direction. In every time frame, trend lines offer a visual representation of support and resistance. They depict price direction and speed, as well as patterns during moments of price contraction.
INDICATION BY TREND LINE
A trend line is a line drawn over or under pivot highs or lows to represent the current price direction. In every time frame, trend lines offer a visual representation of support and resistance. They depict price direction and speed, as well as patterns during moments of price contraction.
TREND LINE STRATEGY
1. In an upswing, wait for a downturn.
2. Draw a trend lines connecting the pullback’s highs.
3. Enter the trade if the price breaks the Trend Lines.
PROS OF TREND LINES
The main benefit of this method is that it is simple and low-cost. If you have historical data, you can rapidly build a trend line and assess differences. While the method isn’t perfect, it can provide for a fast evaluation of a program’s possible outcomes.
CONS OF TREND LINES
The trend line approach has the drawback of not always being accurate. Except for programme implementation, this strategy assumes that the events that influenced the performance variable before to the learning programme are still in place following programme implementation. It also implies that no additional factors entered the circumstance throughout the implementation of the learning programme. Most of the time, however, this is not the case.
KEYS FOR DRAWING TREND LINES
When it comes to creating good trend lines, there are three critical factors to consider.
- The most dependable trend lines will always come from the highest time frames, so start there and work your way down.
- Most trend lines will have some overlap from the high or low of a candle, but the important thing is to get as many touches as possible without cutting through the body of the candle.
- Never try to force a trend line to fit; if it doesn’t fit the chart, it’s not valid and thus not worth having on your chart.
TREND LINES SUPPORT AND RESISTENCE
Trend lines are horizontal or angled lines that highlight support and resistance. A horizontal line is drawn when the price stops and reverses in the same price area twice in a row, indicating that the market is challenging to move past that area.
TREND LINES BREAKOUT STRATEGY
The breakout technique is the first trend lines trading approach you can use. Breakouts in the Forex market can produce some of the most dramatic swings. You’re placing yourself in a position to profit from breakout trend lines if you use this breakout trend line approach. Only buy when the market is in a higher time frame, positive trend for the best results. Or simply want to sell while the market is in a bearish trend on a shorter time frame.
TREND LINE REVERSAL STRATEGY
The reversal method is the second trend line trading approach you can use. Trading reversals is a risk-free approach. Levels of support and resistance are in effect until they are breached. As a result, many traders choose to trade reversals rather than breakouts because they trust them. The trend is once again your ally. Only buy when the market is in a bullish trend and sell when the market is in a bearish trend.
