How Do I Draw a Trendline on a Chart? - How to Draw a Trend Line on a Chart

How to Draw a Trend-Line on a Chart - How Do You Draw Trend-Lines on Charts

Principles of How to Draw a Trend Line on a Chart

1. Use candlestick charts to draw trendlines

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

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

To draw an upwards trendline on a chart use 2 support points in a bullish upwards trend so that to draw the upward trend line and then extend the trend line as shown and illustrated below. The upwards trendline on a chart will illustrate the general direction of prices and as long as price is above this upward trend-line then the upwards trend will remain intact - bullish upward trend.

If prices move below the upwards trend-line which is the support zone for the bullish upwards trend then traders should close out all their open trades - because this may be a trend reversal. In an upwards trend price should generally stay above support level which is marked by the upward trend line on the charts.

Draw a Up Trendline on a Chart in Forex Trading

How Do I Draw an Upward Trend Line on a Chart - How Do I Draw a Trend Line on a Chart

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

To draw a downward trendline on a chart use 2 resistance points in a bearish downwards trend so as to plot the downwards trend-line and then extend the trend-line as illustrated below. Downward trendline on a chart will illustrate the general direction of prices and as long as price is below this downward trend-line then the downwards trend will remain intact - bearish downwards trend.

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

Draw a Down Trendline on a Chart in Forex Trading

How Do I Draw Downward Trend Line on a Chart - How Do I Draw a Trend Line on a Chart