Trend Line Forex

Trend Line Forex

Know how to draw a trend line Advantages of using trend lines in Forex trading. Trend lines are a popular tool in forex technical analysis. Every market, whether forex, equities, commodities and bonds is always located in one of the following three phases. In an uptrend, a downtrend or moving sideways.
Trend lines often act as resistance and support as you can clearly see by the attached chart. I draw a trend line from the deepest point of the chart to the next higher significant low point. When the market is then increased further and then it came to a correction that is twice the price jumped back to the trendline, and then turn around and rise again.

Learn how to draw a trend line. Advantages of using trend lines in Forex charts. But now how to draw a trend line?

The definition of an uptrend, the market makes higher highs and higher lows (higher highs and higher lows) is. This can be well described by a trend line as they can be found on the chart to illustrate. Appears here already but the first problem. There are no fixed rules about how to accurately draw a trend line has. Many traders, however, have agreed that for the trend lines only bar attracts approach in which each of the two bars left and right next to the lowest point higher than the beam, with the trend line is connected. A look at the chart reveals that this is also given. In an uptrend, are always connected the lows, the highs in a downtrend.
However, there are channels (channels), which include the bar from the top and bottom.

Plotting a trend line on a Forex chart gives very valuable information. It helps to determine good entry and exit points, Trend lines can of course also be used to detect when a trade is over. If they break the trend line in early January (the market closed well below the trend line) was the probability that the trend is over very high. That is exactly occurred and the market is several hundred pips View definition in a new window slid down. This knowledge can use it naturally, by placing his stop loss below the trend line.