How Do I Draw Oil Trading Trend Lines Correctly?

Oil Trading How to Draw Oil Trading Trend Lines Correctly - Detailed Tutorial on How to Draw Oil Trading Trend Lines Correctly

Principles of How to Draw Oil Trading Trend Lines Correctly

1. Use candlestick oil trading charts

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

Example 1: How to Draw Oil Upward Oil Trading Trend Line Correctly

To draw an upward oil trend line correctly use two support points in a bullish upwards oil trend so as to draw the upwards oil trend line and then extend the oil trend line as displayed below. The upwards oil trendline will show the general direction of oil prices and as long as crude oil price is above this upwards oil trend line then the upwards oil trend will remain intact - bullish upwards oil trend.

If oil prices move below the upward oil trend line which is the support level for the bullish upwards oil trend then traders should close all their open crude oil trades - because this might be a oil trend reversal trading signal. In an upwards oil trend crude oil price should generally stay above support area which is marked by the upwards oil trend line.

How to Draw Oil Trend-Lines Correct for Upwards Oil Trading Trend

How to Draw Oil Upward Oil Trading Trendline Correctly - How to Draw Oil Trading Trend Lines Correctly

Example 2: How to Draw Oil Downward Oil Trading Trend Line Correctly

To draw a downwards oil trend line correctly use two resistance points in a bearish downward oil trend so as to draw the downwards oil trend line and then extend the oil trend line as displayed below. The downwards oil trendline will show the general direction of oil prices and as long as crude oil price is below this downward oil trend line then the downward oil trend will remain intact - bearish downwards oil trend.

If oil prices move above the downwards oil trend line which is the resistance level for the bearish downward oil trend then traders should close all their open crude oil trades - because this might be a oil trend reversal trading signal. In an downwards oil trend crude oil price should generally stay below the resistance level which is marked by the downward oil trend line.

How to Draw Oil Trading Trendlines Correctly for Downwards Oil Trading Trend

How to Draw Oil Downward Oil Trading Trendline Correctly - How to Draw Oil Trading Trend Lines Correctly