How To Properly Draw and

Trade Trendlinescc: metamensch - https://www.flickr.com/photos/63870127@N06

Important Rules for Building

Trendlinescc: deepwarren - https://www.flickr.com/photos/20998477@N00

Most times you would use the candlewicks to compose the

trendline, however, you could use the candle body in

instances where short term volatility spikes occur outside the

normal range of the sloping trendline.cc: Herr Olsen - https://www.flickr.com/photos/48801602@N07

In order to confirm a trend, you need at

least three points lying on the same linecc: ~Pawsitive~Candie_N - https://www.flickr.com/photos/66301564@N00

Never think of the trend as contained

within of a single line. The trend is not a

line, but an area.cc: shanewarne_60000 - https://www.flickr.com/photos/9075901@N02

If the price action breaks the trendline with its

candlewick, this doesn’t mean that the trend is

necessarily broken.cc: Leo Reynolds - https://www.flickr.com/photos/49968232@N00

As trendlines mature, there will be more of a tendency for

price reactions at the trendline levels, and many times you

will see false breakouts around these areas

cc: Ricky Flores - https://www.flickr.com/photos/8985668@N03

TRADING THE TRENDING MOVE

• When we confirm a trendline, we

can prepare to trade with the

trending move.

• We can trade the next bounce

from that trendline, assuming that

price action confirms our setup.

TRADING CORRECTIONS

• A countertrend trader would sell at the tops of the upper channel with targets near the bottom of the channel, or buy at the bottom of a lower channel with targets near the top of the channel

There are four signs you need

in order to confirm a reversal.cc: Khairil Zhafri - https://www.flickr.com/photos/26037046@N00

1 - A break in the trend occurs

2 - The price decreases further and creates a bottom

3 - The price then increases and tests the already broken trend as a resistance.

4 - The price decreases again and breaks the already established support level

TRENDLINE BREAKS AND REVERSALS

• Traders should be on the

lookout for potential

trendline breaks, as this is

an attractive way to get in

the beginning of a new price

move.

Check Out the “IN DEPTH”

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