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How Do You Draw Trend Lines Correctly on fx Charts?

How Do You Draw Trend Lines Correctly on Charts?

Course on How Do I Draw Trend Lines Correctly - Detailed Guide on How Do You Draw Trend Lines Correctly

Principles of How Do Draw Trend Lines Correctly?

  1. Use candlestick charts

  2. The areas which are used to draw are along the lows of the price bars in a bullish market. An upwards bullish trend is defined by higher highs & higher lows.
  3. The points and levels which are used to draw are along the highs of price bars in a bearish market. A downward bearish trend is defined by lower highs and lower lows.
  4. The points used to draw trendlines are extremes points - the high or the low price. These extremes are critical because a price close beyond the extreme tells traders the trend of instrument might & may be changing. This is an entry or an exit trading signal.
  5. The more often a trendline is hit but not broken, the more powerful its market signal.

Examples of How Do You Trendlines Correctly

Forex Example 1: How Do You Draw Upward Trendline Correctly?

To draw an upwards trendline correctly use 2 support areas 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 will show the general direction of prices & as long as the price is above this upward trend-line then the upwards trend will remain intact - bullish upward trend.

If prices dip below the upward trendline, which serves as the support zone for an advancing trend, traders should consider closing open positions, as this may indicate a reversal in the trend. Generally, in an upward trend, prices should remain above the support level indicated by the upward trendline.

How Do I Draw Trend-Lines Correctly for Upwards Trend

How to Draw Trend Lines Correctly on Charts

How Do I Draw Upwards Trend Line Correctly

Forex Example 2: How Do You Draw Downwards Trend Line Correctly?

To draw a downwards trend line correctly use 2 resistance points in a bearish downward trend so as to plot the downwards trend line and then extend the trend-line as shown below. Downwards trend line will show 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 rise above the downward trend line, which serves as the resistance zone for the bearish trend, traders should close all open positions, as this may signal a potential trend reversal. In a downward trend, prices should typically remain below the resistance area defined by the downward trendline.

How Do You Draw Trend Lines Correctly for Down-wards Trend

How Do You Draw Trendlines Correctly on fx Charts? - How Do I Draw Trendlines Correctly on Charts

How Do You Draw Downwards Trend Line Correctly

How Do You Draw Trendlines Correctly on Charts?

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