Lets start out with a naked forex chart. So moving on to the next chart. I have now defined the swing low points higher lows in the uptrend which are highlighted in blue. Each one of these was reasonably significant and is noticeable. This is important as we want to add trend lines that other traders will see.

This is vital if the order flow is to be in place when we commit to a trade.

How to Use Trend Lines in Forex - lazuxyderonav.web.fc2.com

Notice how the first three touches were all very precise hitting the trend line on this forex chart. The more precise the trend line touches, the better in my opinion.

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Trend lines should be used with other technical analysis techniques in order to maximize potential of a trade working in your favour. Home Forex Trading Articles Trading Psychology Forex Trading Tutorials Commodities And Indices Gold Technical Analysis Charts Contact Risk Warning. Basic trend line tutorial for new traders. Pinpoint levels where reversals may occur Identifying breakout areas.

These signal that a change in trend may be imminent. Confluence with other technical signals.

Drawing a trend line Lets start out with a naked forex chart. So how do I draw a trend line? We finally add the ascending trend line.

Here are a few other tips to help identify and draw trend lines The more touches a trend line has the more relevant it becomes. Other traders will see this trend line and potentially be placing orders around it.

This helps with the self fulfilling prophecy element of a trend line trade and the order flow. If the right trend lines are taken they can be ideal for stealing a reasonable amount of pips though.

More touches are a bonus.

I sometimes draw a trend line with two touches if anticipating a third touch reversal due to confluence. However, this is an advanced technique. It is preferable for the touches of the trend line to display a strong reversal each time they hit. This is of course relative to the current market conditions. Leave a reply Cancel reply Comment Name Email Website.