Trading Stocks Read Stocks Trading Charts using Trend Lines

To analyze stocks charts using trends stocks traders will have to first ascertain a stocks trend.

How Do you determine a stocks trend on a stocks chart? - to determine a stocks trend on a stocks chart stocks traders will need to learn the correct way of determining a stocks trend - a stocks trend is a general stocks price direction in the stocks price movement where stocks price movement is either up or down.

When the stocks trend is heading upwards it means that stocks price movement is moving higher and stocks price are closing higher than where they opened & therefore the stocks trend direction of stocks price is upwards.

When the stocks trend is heading downward it means that stocks price movement is moving lower and stocks price are closing lower than where they opened & therefore the stocks trend direction of stocks price movement is downwards.

To determine a stocks trends on stocks charts stocks traders will use a sequence of stocks price highs or stocks price lows.

Traders will then draw a stocks trend line connecting stocks price highs or stocks price lows and this stocks trend-line will then determine the direction of the trend whether upward or downwards.

Upwards Stocks Trend

To determine an upwards trend line on stock charts - traders will determine stocks price lows that are sloping upward and then use these stocks price lows to draw a stocks trend-line - upwards stocks trend-line to connect these stocks price lows and once this upward trendline is drawn on the stock chart it will then be used to figure out the upward trend.

Drawing a Stocks Upward Trend-Line - How Do You Read Stocks Trading Charts using Trend Lines?

When the stocks price moves up it forms higher highs and higher lows forming an upward movement of stocks price. An upwards stocks trendline can then be drawn by connecting these stocks price higher lows.

To draw this upwards trendline - we use support levels. To plot the upward trendline correctly two support levels on stocks price chart are needed.

Upwards Trend Line on Stocks Chart

Stock Downward Trend

To determine a stocks downwards trend line - traders will determine stocks price highs that are sloping downward and then use these stocks price highs to draw a stocks trendline - downwards stocks trend-line to connect these stocks price highs and once this downward trend-line is drawn on stocks chart it will then be used to figure out the stocks trading downward trend.

Drawing a Stocks Downward Trendline

When it comes to learning how to draw stocks trend lines and determining stocks trends on stocks charts, you need to know that when price movement are moving they form lower lows & lower highs forming a downwards stocks price direction. These are points that are then used to plot the downward stocks trend line.

To determine a stocks downwards trend - we use resistance zones to plot a downward stocks trendline and to determine a downwards stocks trend correctly 2 resistance levels on the stocks trading chart are needed.

Downward Trend Line on Stocks Chart

Once stocks traders draw & determine a stocks trend using stocks trend-lines - traders will then open stock trades in the direction of this stocks trend. This is because once stocks price movement start to move in a stocks trend direction either upward or downwards - the stocks price movement will continue to keep moving in this direction for some time.

Read Stocks Trading Charts using Trend Lines