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Trend Lines – How To Draw Them?

Discussion in 'Forex Discussions' started by painofhell, Mar 6, 2016.

  1. painofhell

    painofhell Content Contributor

    Jun 24, 2015
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    Best Way To Draw Trend Lines
    I’m often asked regarding the best way to draw trend lines and how to use them. While it is an essential technical indication, you need to understand that this is not an exact science. There is no one right and perfect way to do it. In this post i would like to address a few points you should consider regarding trend lines.

    What is a Trend Line?

    Technical analysis is built on the assumption that prices often trend. Trend Lines are an important technical tool that used to identify and confirm trends in the Foreign Exchange market. A trend line is drawn as a straight line that connects two or more price levels and then extends further to act as a region of support or resistance. The purpose of drawing trend lines is to predict and/or identify where a possible change in trend may take place.

    Drawing Trend Lines – a Subjective Viewpoint
    As i said before, drawing trend lines is not a science. It’s an art that may take some time to master. Everyone has their own unique way of drawing a trend line.Technical signals that indicated by various Forex tools are very subjective. So, traders are entirely free to choose what points to be used to create the line.

    Different Ways of Plotting a Trend Line

    Traders may never agree to use the same levels in different lines, and some will only connect the closing prices, while others may use a mix of open, close and high prices. What you should note, is that regardless of the exact price levels being connected, you should try to get the most influential line. The strongest trend lines considered to be the ones which their region has been reached the most times by the price action.



    Up-trend and Down-trend Lines

    In general, an upward sloping trend line is used to connect prices that act as support, when the given asset is trending upward. It means that an upward sloping trend line is drawn below the price and connects either a period of low levels or a series of closing prices. Conversely, a downward sloping trend line is typically used to connect a period of highs that act as resistance while the particular asset is trending downward. The trend lines tendency is to proceed in the same direction, so use it until proven otherwise. However note that once trend lines are violated they usually change their roles. The up trend line become a line of resistance instead of support, and vice versa.
  2. sininfinity

    sininfinity Trusted Member

    Apr 4, 2014
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    Trade traditional way is to draw a trendline is to connect 2 lines. Either high with another high or low with another low. But not everyone draws like this and when they have enough experience with the trendline they draw them slight differently.
  3. Sharon Higgins

    Sharon Higgins New Member

    Oct 29, 2014
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    It is nice to work out with trend lines especially if we are doing it properly, but this is where problems lies, I think we need to be really good in order to get it right. I personally focus on sites that do it and there are plenty ones which are like that. I am working with OctaFX broker and they too help me fair bit with their educational guide that helps me understand all the basis nicely plus there are also demo contest available which helps me with practicing well and that automatically leads to serious profits, so I am able to work well and that always help me creating strategies that works well on real account and I am able to make profits regularly.

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