Trend Lines Are Still a Great Technical Indicator For Forex Trading

Saturday, March 5, 2011




When you are forex trading you really need to take advantage of anything you can. A slight edge can mean the difference between thousands literally. That is where this article comes in. We are going to look at how drawing trend lines can give the forex trader an advantage.





Just a basic reminder about technical analysis, technical indicators make different mathematical calculations and display the results on a price chart. The skilled forex trader interprets these technical indicators and makes trading decisions.





The most basic technical indicator is is one that you can draw with your own hand, it is referred to as a trend lines.





To draw trend lines simply:





1. Print out an historical price chart for a given time interval of a currency pair.


2. draw a line connecting two or more parts of a graph that have higher lows, or lower highs.





Poof, now you have trend lines. The trend line represents the basic price direction of the currency pair. When the price of the currency pair breaks through the trend lines in the direction opposite of the trend, you would expect a reversal.





By reversal I mean this:





1. If the prior trend was upward and the price broke through the trend lines moving down, this would indicate a new downward trend using the trend lines method.


2. If the prior trend was downward and the price broke through the trend lines moving up, this would indicate a new upward trend using the trend lines method.





Trend lines can act as either floors or ceiling for price data. When these lines are penetrated, the price usually moves completely to the other side of the trend line.


4 comments:

Blogger May 14, 2017 at 5:19 AM  

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Unknown June 25, 2018 at 3:12 AM  

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.

The 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

Chart patterns such as "Triangles, Flags and Wedges" are price formations that will provide you with consistent profits.

Before the age of computing power, the professionals used to analyze every single chart to search for chart patterns. This kind of analysis was very time consuming, but it was worth it. Now it's time to use powerful dedicated computers that will do the job for you:

==> http://www.forextrendy.com?kdhfhs93874

Unknown July 22, 2018 at 9:30 PM  

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.

The 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
Chart patterns such as "Triangles, Flags and Wedges" are price formations that will provide you with consistent profits.

Before the age of computing power, the professionals used to analyze every single chart to search for chart patterns. This kind of analysis was very time consuming, but it was worth it. Now it's time to use powerful dedicated computers that will do the job for you:

==> http://www.forextrendy.com?kdhfhs93874

Unknown October 6, 2018 at 2:22 AM  

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.

The 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

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