Upward Trend Lines and Channels - MetaTrader 4 Tools for Drawing Forex Trend Lines and Forex Channels
An upward trend line is drawn below the trend pattern by connecting at least two lows. This upward trend line will draw a line that show the general direction of the forex market.
The diagram below shows how price moves when it is moving in a bullish market. The price will move upwards forming support levels.
Since the forex market moves in a zigzag manner traders normally draw a forex trend line which shows the general upwards direction of the forex 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 trend line is a technical sell signal, and usually the first indication that an upward 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 trend line can then be drawn by connecting these higher lows.
To draw this upward trend line setup we use supports. To draw the upward trend line correctly two support levels are needed. When price touches the upward trend line we buy and place stop loss orders just a few pips below the upward trend line. The diagram below shows an example of an upward trend line.
The forex upward trend line setup will show the general direction of the forex market as bullish therefore traders will only open buy long trades as long as price is within this upward 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 trend line to open buy 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 trader would have opened buy/long trades from the signals generated at the support1, support2, support3 and these 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 trend line and then adjusted to touch the top boundary of the price movement. This then forms an upward forex channel and as long as the 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 traders to show levels where it is best to take profits. 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 - Forex Trend Lines MetaTrader 4 Trend Line Indicator
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 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 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 trend line on a forex chart just click on this MT4 trend line drawing tool and select the point where you want to draw the 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.