FOREX TRENDS LINES

Page 3

The below chart (above) displays another clear example of how not to draw a trend-line. What's happened here is that the candlestick at point 2 has closed as an indecisive Doji however, this does not grant acceptance for trend-line application.

Even though that one candlestick is in fact signalling a potential reversal to the upside, the upside confirmation leg has not yet been formed. Simply compare this to the lower chart.

4 1.jpg
5.jpg