Upward Trend Lines & Channels

An upwards trend-line is plotted below the trend pattern setup by connecting at least two lows. This upward trend line will draw a line that show the general direction of the market.

The diagram below shows how gold trading price moves when it is moving in a bullish market. The gold price will move up-ward forming support regions.

Since the market moves in a zigzag manner traders normally draw a trend line which shows the general upwards direction of the market.

A up trend occurs when the fore gold price will continue to make consecutive higher highs and higher lows. Each price high is higher than the previous high - higher high, & each low is higher than the previous low - higher low.

XAUUSD Up trend-lines gain more validity every time gold trading price touches this upward trend line but does not penetrate it. A up trend remains in place until this series of higher highs and higher lows is broken.

A downside penetration of an up-wards trend-line is a technical sell signal, and usually the first indication that an upwards trend may soon end.

Upward Trendline MetaTrader 4 Trend Line Indicator

When the market moves up it forms higher highs & higher lows forming a bullish market movement - Upwards Trend. An upward trend-line can then be plotted by connecting these higher lows.

To draw this up-wards trendline setup we use supports. To draw the up-ward trend-line correctly two support areas are needed. When trading price touches the up-wards trend line we buy and place stop loss orders just a few pips below the upward trend line. Diagram below shows an example of an upward trend line.

The upward trend line setup will show the general direction of the market as bullish therefore traders will only open buy long trades as long as trading price is within this upward trend bullish market setup and within the support levels. These support levels are the levels where if the market retraces then these points will provide strong supports for the trading price. This is why many buyers will wait until trading price retraces downwards and hits these retracements levels market the upward trend line to open buy trades. trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.

In the above up-ward trend line xauusd setup the trader would have opened buy/long trades from the signals generated at the support1, support2, support3 and these gold trades would have made a lot of trading profits with minimum amount of draw-down/retracement.

Upward Channel

An upwards channel is plotted by drawing a line that is parallel to the upward trend line & then adjusted to touch the tops boundary of the price movement. This then forms an up-wards xauusd channel & as long as a price stays between these 2 channels the bullish market movement will continue heading upwards.

How to Trade Upwards Channel

This upwards channel is used by traders to show levels where it's best to take profits. Traders will take some profit once the trading price touches the upper channel and wait for another retracement before opening a long buy gold trade again.

MetaTrader 4 Tools for Drawing Trend Lines & Channels

The MT4 Trendline Indicator drawing tools to draw these trend lines & channels setups on the MT4 are located on the MetaTrader 4 drawing tool bar within the MetaTrader 4 platform, To get this MT4 tool bar if it is not activated on your platform, Click in 'View' Next to the 'File' menu at top left corner of MetaTrader 4 platform & click View, Then Click on Tool Bars, Then Check the 'Lines Toolbar' by clicking on it.

Below is the image Image of the MT4 drawing toolbar. To draw a trend line on a chart click on this MetaTrader 4 trend line plotting tool and select the point where you want to plot the trend line.

This is one of the learn technical analysis lesson among the many learn tutorials on this website located on the side navigation menu, where you will learn how to draw trend lines & analyze these trend lines setups.