Hi Traders
I am Kelvin and I have been trading forex for a living for several years now. As a trader, I understand the problem that most new traders encounter when they are learning the rope.
Therefore I have written an article here to share with you how to draw forex trend line.
Knowing how to draw forex trend lines is one of the most important things that a forex trader must know.
Without a proper forex trend line, you will not be able to know whether the price is going to reverse or continue to move in its direction.
In short, the forex trend lines are actually area of support and resistance. These are areas where the price will react to and make their respective movement and that are why all traders must know how to draw a proper trend line.
Below is how you can draw forex trend line
Step 1: Locate 2 or more swing highs or swing lows
Step 2: Connect the swing highs or swing lows to get the trend line
The more swing highs or lows you have on a trend line, the more powerful the line will be. Besides the number of highs or lows, the power of the swing high or low is equally important.
The more significant the swing has, the more powerful is the trend line.
Here is how you can tell the strength of the swing
Swing highs are N shaped candlestick pattern while swing lows are V shaped candlestick pattern.
The deeper the N or V shaped pattern; the more significant will be the swing.
If your trend line is made up of significant swings, it will be considered a powerful trend line and the price will usually be repelled by it.
I hope that you find the above information useful for you and wish you all the best to your trading.
If you are interested to find out more about how to formulate a reliable trading strategy with forex trend line, you can take a look at my website where I share with you my forex trend line strategy.
Drawing trend lines is one of the few easy techniques that really WORK. Prices respect a trend line, or break through it resulting in a massive move. Drawing good trend lines is the MOST REWARDING skill.
ReplyDeleteThe problem is, as you may have already experienced, too many false breakouts. You see trend lines everywhere, however not all trend lines should be considered. You have to distinguish between STRONG and WEAK trend lines.
One good guideline is that a strong trend line should have AT LEAST THREE touching points. Trend lines with more than four touching points are MONSTER trend lines and you should be always prepared for the massive breakout!
This sophisticated software automatically draws only the strongest trend lines and recognizes the most reliable chart patterns formed by trend lines...
==> http://www.forextrendy.com?kdhfhs93874