Plotting a trend line on a Forex chart gives entry points in forex trading valuable information. In addition, it will also help to determine good entry and exit points, best positioning for profit taking and placing protective stops. So, shall we learn how to draw trend line to make it our good friend in profitable forex trading?
That is why when the trend is going to change our trend line will be crossed, which therefore will give us a signal that the price can start moving in another direction. In the uptrend, Forex trend line is drawn through the lowest swing-points of the price move. Connecting at least two «lowest lows» will create a trend line. In the down trend, trend line is drawn through the highest swing-points of the price move.
Connecting at least two «highest highs» will create a trend line. Keep in mind that same charts may show slightly different “highs” and “lows” if you try to compare different Forex brokers. Another sample of drawing trend lines: main and inner downtrend lines. Forex trading is a high risk investment.
All materials are published for educational purposes only. Who’s online There are currently 10 users online. Submitted by Edward Revy on February 28, 2007 – 13:07. Trading systems based on fast moving averages are quite easy to follow. Let’s take a look at this simple system. Time frame chart: 1 hour or 15 minute chart. Indicators: 10 EMA, 25 EMA, 50 EMA.