What's an Examples of a Trend Line Technical Analysis?

Gold Trend Indicators

How to Use Trend-Lines to Set Entry, Exit & Setting Stop Loss Orders:

Trend Line technique can be used to determine good entry and exit points for trades, protective stops are placed just below them.

The trend line bounce analysis strategy is a low-risk entry strategy used by traders to place entry trades after price has retraced.

Trades are setup along these trend line bounce levels and a stop losses placed just above the downward trend line for a downward trend or below the upward trend-line in an upwards trend.

The trend line break is a crucial trend reversal indicator of possible reversal signal. When the trend line is broken the price starts move in the opposite market direction. This provides an early exit signal for traders to exit their open trades & take profits.

When there a penetration of these trend-line levels, it is a signal that the price can start moving in the opposite direction.

Unlike other analysis indicators there's no formula used to calculate a trend line, this formation is just drawn between 2 chart points on a chart.

Analysis Methods of Trendlines

The trend line bounce is a continuation signal where trading price bounces off this line to continue moving in same direction as that of the trend. In a downwards trend, the market will bounce downward after hitting this trend line bounce level which is the resistance level. In an upward trend, the market will bounce upward after hitting this trend line bounce level which is the support level.

The trend-line break is a reversal signal where the market moves through the trend line & starts heading in the opposite market direction. When a up-trend is breached then the sentiment of market reverses & becomes bearish and when a down trend is broken then the sentiment reverses and becomes bullish.

For very strong trends, after this trend line break signal, the price will consolidate for some time before moving in the opposite market direction. For short term trends then this trend-line break signal will mean price may reverse direction immediately.

In xauusd, both the trend line bounce & the trend line break that are used in analysis of charts are based upon these trend line levels being support & resistance levels.