How Do I Draw Forex Trend Lines Correctly? - How to Draw Forex Trend Lines Correctly
How to Draw Forex Trend-Lines Correctly - Detailed Guide on How to Draw Forex Trend Lines Correctly
Principles of How to Draw Forex Trend Lines Correctly
Use forex candle-stick charts
- The points used to draw are along the lows of the price bars in a bullish forex market. An upwards bullish forex trend is defined by higher highs & higher lows.
- The points used to draw are along the highs of the price bars in a bearish forex market. A downwards bearish forex trend is defined by lower highs & lower lows.
- The points used to draw forex trend lines are extremes points - the high or the low price. These extremes are important because a close beyond the extreme tells forex traders the trend of the currency pair might be changing. This is an entry or an exit forex trading signal.
- more often a trend line is hit but it's not broken, more powerful its forex trend signal.
Example 1: How to Draw Forex Upward Trend Line Correctly
To draw an upwards forex trend line correctly use 2 support points in a bullish upward trend so that to draw the upward trend-line & then extend the trend-line as shown & illustrated below. The upward trendline will show the general direction of forex prices and as long as price is above this upwards trend line then the upward trend will remain intact - bullish upwards forex trend.
If prices move below the upwards trend line which is the support level for the bullish upwards forex trend then traders should close all their open forex trades - because this might be a forex trend reversal trading signal. In an upwards forex trend price should generally stay above support level which is marked by the upward trend line.
How to Draw Forex Trend-Lines Correctly for Upwards Trend
How to Draw Forex Upward Trendline Correctly - How to Draw Trend Lines Correctly
Example 2: How to Draw Forex Downward Trend Line Correctly
To draw a downwards forex trend line correctly use two resistance points in a bearish downward trend so as to draw the downwards forex trend line & then extend the trend line as illustrated below. The downwards trendline will show the general direction of forex prices & as long as price is below this downwards trend line then the downwards trend will remain intact - bearish downwards forex trend.
If prices move above the downward trend line which is the resistance level for the bearish downwards forex trend then traders should close all their open forex trades - because this might be a forex trend reversal trading signal. In an downward forex trend price should generally stay below the resistance level which is marked by the downwards trend line.
How to Draw Forex Trend-Lines Correctly for Downwards Trend
How to Draw Forex Downward Trendline Correctly - How to Draw Trend Lines Correctly
