How to Draw a Commodity Trading Trendline on a Chart

How to Draw a Commodity Trading Trend-Line on a Chart - How to Draw Commodity Trading Trendlines on Commodities Trading Charts

Principles of How to Draw a Commodity Trading Trend Line on a Chart

1. Use commodity candle-stick charts to draw commodity trend lines

2. The points used to draw a commodity trend-line on a commodity chart are along the lows of the commodity price bars in a bullish commodity market. An upwards bullish commodity trend is defined by higher highs & higher lows.
3. The points used to draw a commodity trend-line on a commodity chart are along the highs of the commodity price bars in a bearish commodity market. A downward bearish commodity trend is defined by lower highs and lower lows.
4. The points used to draw commodity trend lines on the commodities trading charts are the extremes points - the high or the low commodity price. These extremes are important because a close beyond the extreme chart points tells commodity traders the commodity trend might be changing. This is an entry or an exit commodity signal.
5. The more often a commodity trend-line on a commodity chart is hit but it is not broken, the more powerful its commodity trend signal.

Example 1: How to Draw a Upward Commodity Trading Trend Line on a Chart

To draw an upward commodity trend-line on a commodity chart use two support points in a bullish upward commodity trend so that to draw the upward trend-line and then extend the trend-line as illustrated and shown below. The upward commodity trend-line on a commodity chart will show the general direction of commodity prices and as long as price is above this upwards trend line then the upward trend will remain intact - bullish upwards commodities trend.

If commodity prices move below the upwards trend line which is the support level for the bullish upwards commodity trend then commodities traders should close all their open commodities trades - because this might be a commodity trend reversal trading signal. In an upwards commodity trend commodity price should generally stay above the support area which is marked by the upwards trend line on the commodity charts.

Draw a Up Commodity Trend-Line on a Trading Chart in Commodity Trading

How to Draw an Upward Commodity Trading Trendline on a Chart - How to Draw a Commodity Trading Trend-Line on a Chart

Example 2: How to Draw a Downward Commodity Trading Trend Line on a Chart

To draw a downwards commodity trend-line on a commodity chart use two resistance points in a bearish downward commodity trend so as to draw the downwards commodity trend line & then extend the trend line as shown below. Downward commodity trend-line on a commodity chart will show the general direction of commodity prices & as long as price is below this downward trend line then the downwards commodity trend will remain intact - bearish downward commodities trend.

If commodity prices move above the downward commodity trend line which is the resistance level for the bearish downwards commodity trend then traders should close all their open commodities trades - because this might be a commodity trend reversal trading signal. In an downwards commodity trend commodity price should generally stay below the resistance level which is marked by the downward trend-line on a commodities trading chart.

Draw a Down Commodity Trend-Line on a Trading Chart in Commodity Trading

How to Draw a Downward Commodity Trading Trendline on a Chart - How to Draw a Commodity Trading Trend-Line on a Chart