Principles of How Do I Draw Oil Trading Trend Lines?

1. To draw oil trend line crude oil traders should use oil candles trading charts

2. The points that are used to plot the oil trend lines are points that are along the lows of the crude oil price bars in an upward moving oil market. An upward oil trend move is defined by higher highs and higher lows on the crude oil price chart.
3. The points that are used to plot the oil trend lines are along the highs of the crude oil price bars in a downward moving oil market. A downward oil trend move is defined by lower highs and lower lows on the crude oil price chart.
4. The points that are used to draw oil trend lines are extremes points - the high or the low oil price. These crude oil price extremes are important because a oil price close beyond these extreme crude oil price points is interpreted as a oil signal that the oil trend direction might be changing. This is analyzed as entry oil signal or an exit oil trade signal.
5. The more often a oil trend line is tested (touched) by the crude oil price but it is not broken, then the more powerful the oil signal of this trend line.

There are two main oil technical analysis methods of trading this oil trend line setup:

1. The Oil Trading Trend Line Bounce
2. The Oil Trading Trend Line Break

Technical Analysis Methods of Oil Trendlines

Oil Trend-Line Bounce - How Do I Interpret Oil Trading Trend Line Bounce?

The oil trend line bounce is interpreted as a oil trend continuation signal. Oil Trading trend line bounce is when the crude oil price bounces off the oil trend line to continue moving in the same direction of the oil trend line.

• In an upward oil trend - crude oil price will bounce upwards after hitting this upward oil trend line level which is the area of crude oil price support region.
• In a downwards oil trend - crude oil price will bounce downwards after hitting this downward oil trend line level which is the area of crude oil price resistance region.

Oil Trendline Break - How Do I Interpret Oil Trading Trend Line Break?

The oil trend-line break - the oil trend-line break is a reversal oil signal where the crude oil price goes through the oil trend line & starts moving in the opposite direction to that of the crude oil trend.

When a oil upward trend line is broken - the oil market sentiment reverses and becomes bearish

When a oil downward trend is broken - the oil market sentiment reverses & becomes bullish.

For very strong oil trends, after a oil trend line break trading signal, the crude oil price will consolidate for some time before moving in the opposite direction. For short term oil trends then this trend-line break reversal oil signal will mean crude oil price may reverse immediately after this oil trendline break signal.

Oil Trading trend line bounce and oil trendline break are used in oil technical analysis based on technical analysis theory that these oil trend line levels represent support and resistance levels for the oil price movement.

Entry, Exit & Setting stops:

Oil Trading trend line trading method is used to determine entry and exit points for oil trades, protective stop loss oil orders are placed just above or below these oil trend lines after crude oil trades are opened using oil trend line technical analysis methods.

The oil trend line bounce signal is a low risk entry oil trading method used by crude oil traders to place entry crude oil trades after crude oil price has retraced and is now bounced of a oil trend line & is now moving in the direction of the crude oil trend. Oil trades are opened along these oil trend line levels and a stop loss oil orders placed just above or below these oil trend lines.

The oil trendline break signal is an indicator of possible oil trend reversal. When a oil trend line is broken the crude oil price will start moving in the opposite direction. This oil trendline break signal generates an early exit oil signal for crude oil traders to exit their open crude oil trades and take profit for these crude oil trades. When there a penetration of these oil trend line levels - oil trendline break - this is a oil signal that the crude oil price can start moving in the opposite direction to that of the current crude oil trend.

Unlike other crude oil trading analysis indicators there is no formula used to calculate oil trend lines, this oil trend line formation is drawn between two chart points on the trading crude oil price chart.

How Do I Interpret Oil Trading Trend Line Break?