How Do I Draw Stocks Trend Lines Correctly?
Stocks How to Draw Stocks Trend Lines Correctly - Detailed Tutorial on How to Draw Stocks Trend Lines Correctly
Principles of How to Draw Stocks Trend Lines Correctly
Use stocks trading candle charts
- The points used to plot are along the lows of the stocks price bars in a bullish stocks market. An upwards bullish stocks trend is defined by higher highs & higher lows.
- The points used to plot are along the highs of the stocks price bars in a bearish stocks market. A downward bearish stocks trend is defined by lower highs and lower lows.
- The points used to draw stocks trend lines are extremes points - the high or the low stocks price. These extremes are important because a close beyond the extreme tells stocks traders the stocks trend of stocks might be changing. This is an entry or an exit stocks trade signal.
- The more often a stocks trend-line is hit but not broken, the more powerful its stocks trend signal.
Examples 1: How to Draw Upwards Stocks Trend Line Correctly
To draw an upward stocks trend line correctly use two support points in a bullish upwards stocks trend so as to plot the upwards trend-line and then extend the trend-line as shown below. The upward stocks trend-line will show the general direction of stocks prices & as long as price is above this upwards trend line then the upwards trend will remain intact - bullish upward stock trend.
If stocks prices move below the upwards trend line which is the support level for the bullish upward stocks trend then traders should close all their open stock trades - because this might be a stocks trend reversal signal. In an upwards stocks trend stocks price should generally stay above support area which is marked by the upwards trend line.
How to Draw Stocks Trendlines Correctly for Upwards Stocks Trend
How to Draw Upward Stocks Trend-Line Correctly - How to Draw Stocks Trend Lines Correctly
Examples 2: How to Draw Downwards Stocks Trend Line Correctly
To draw a downwards stocks trend line correctly use two resistance points in a bearish downward stocks trend so as to plot the downwards stocks trend line & then extend the trend line as shown below. Downward stocks trend-line will show the general direction of stocks prices & as long as price is below this downward trend line then the downwards stocks trend will remain intact - bearish downwards stock trend.
If stocks prices move above the downwards stocks trend line which is the resistance level for the bearish downward stocks trend then traders should close all their open stock trades - because this might be a stocks trend reversal signal. In an downwards stocks trend stocks price should generally stay below the resistance area which is marked by the downwards trend line.
How to Draw Stocks Trend Lines Correctly for Downwards Stocks Trend
How to Draw Downward Stocks Trend-Line Correctly - How to Draw Stocks Trend Lines Correctly
