Upward Trend Lines and Channels - MetaTrader 4 Tools for Drawing Trend Lines and Channels
An upward forex trend line is drawn below the forex trend pattern by connecting at least two lows. This upward forex trend line will draw a line that show the general direction of the forex trading market.
The diagram below shows how forex price moves when it is moving in a bullish market. The forex price will move upwards forming support levels.
Since the forex trading market moves in a zigzag manner forex traders normally draw a forex trend line which shows the general upwards direction of the forex trading market.
A forex uptrend occurs when the fore price makes consecutive higher highs and higher lows. Each high is higher than the previous high - higher high , and each low is higher than the previous low - higher low.
Forex Uptrend lines gain more validity each time price touches this upward trend line but does not penetrate it. A forex uptrend remains in place until this series of higher highs and higher lows is broken.
A downside penetration of an upward forex trend line is a technical sell signal, and usually the first indication that an upward forex trend may soon end.
Drawing an Upward Forex Trend Line - Upward Forex Trend Line MetaTrader 4 Trend Line Indicator
When the forex market moves up it forms higher highs and higher lows forming a bullish market movement - Upward Forex Trend. An upward forex trend line can then be drawn by connecting these higher lows.
To draw this upward forex trend line setup we use supports. To draw the upward forex trend line correctly two support levels are needed. When forex price touches the upward forex trend line we buy and place stop loss orders just a few pips below the upward forex trend line. The diagram below shows an example of an upward forex trend line.
The forex upward trend line setup will show the general direction of the forex market as bullish therefore forex traders will only open buy long forex trades as long as price is within this upward forex trend bullish market setup and within the support levels. These support levels are the levels where if the forex market retraces then these points will provide strong supports for the price. This is why many forex buyers will wait until forex price retraces downwards and hits these retracements levels market the upward forex trend line to open buy forex trades. Forex trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.
In the above upward trend line forex trading setup the forex trader would have opened buy/long forex trades from the signals generated at the support1, support2, support3 and these forex trades would have made a lot of profits with minimum amount of draw-down/retracement.
Upward Forex Channel - Upward Forex Channel MetaTrader 4 Channel Indicator
An upward forex trading channel is drawn by drawing a line that is parallel to the upward forex trend line and then adjusted to touch the top boundary of the forex price movement. This then forms an upward forex channel and as long as the forex price stays between these two channels the bullish market movement will continue moving up.
Trading The Forex Channel - How to Trade Upward Forex Channel
This upward forex channel is used by forex traders to show levels where it is best to take profits. Forex traders will take some profit once the price touches the upper channel and wait for another retracement before opening a long buy trade again.
MetaTrader 4 Tools For Drawing Trend Lines and Channels
The Forex MetaTrader 4 Trend Line Indicator drawing tools to draw these forex trend lines and forex channels setups on the MT4 are located on the MetaTrader 4 drawing tool bar within the MetaTrader 4 forex trading platform, To access this MT4 tool bar if it is not activated on your forex trading platform, Click in "View" Next to "File" at the top left corner of the MT4 forex platform and click View, Then Click on Tool bars, Then Check the "Lines Toolbar" by clicking on it.
Below is the screenshot Image of the MT4 drawing tool bar. To draw a forex trend line on a forex trading chart just click on this MT4 trend line drawing tool and select the point where you want to draw the forex trend line.
This is one of the learn forex trading technical analysis lesson among the many learn forex trading tutorials on this website located on the side navigation menu, where you will learn how to draw forex trend lines and analyze these forex trend lines setups.