FOREX TRENDS LINES
What are Trend lines? A trend is when prices move in a zig zag but still follow a path or a trend in one direction. Trend lines connect significant low in an uptrend and they connect highs in a downtrend, creating dynamic resistance.
Trendiness are easily recognizable lines that traders draw on charts to connect a series of prices together. Trend lines are used to give traders a good idea of the direction an investments value might move.
Probably no exercise in technical analysis is more individualistic than identifying and drawing trend lines. Very often it comes down to a matter of beauty being in the eye of the beholder. But in the case of chart analysis, beauty is order, and the trend lines you draw are the outlines of that order. Ultimately drawing trend lines isn't complicated with a bit of practice, you'll get the hang of it pretty quickly.
What is a trend line? Basically a trend line is a line that connects significant price points over a defined time period on a price chart. The significant price points are usually the highs and lows of bars or candles through in the case off candles you can also use the close levels of the candle's real body.
Connecting the dots. The start point in drawing trend lines is looking at the overall forex price chart in front of you. What do you see? If it's your first time looking at a price chart, it probably looks like a jumble of meaningless bars and candles. The key is to turn that jumble into a meaningful visualization. of what's happening to prices.
Scan the chart from left to right starting in the past and looking into the present. What are prices doing? Are they moving up or down or a little bit of both? If you are looking at a currency chart you can't they are doing a little bit of both. Draw your first trend lines to connect the highest highs (you need only two points from a line) and the lowest lows, to capture the overall range in the observed period. Always use the extreme points of the price bars or candles when connecting price points (lows with lows, highs with highs).
Look at what's happening between those forex two trend lines. You'll invariably see a number of smaller, distinct price movements making top the whole. You can draw trend lines to connect the highs price moves down and the lows of price moves up. Be sure to extend your trend lines all the way to the right edge of the chart, regardless of the other bars or candles that later break it. look for evens, wether it's horizontal, sloping down, shooting steeply higher, or anything in between. Eventually that evens will be brokenly price moves that break through the forex trend lines.