Trendlines are present in virtually every graphical analysis, it is difficult to imagine without them, traders are able to determine the direction of motion of quotations and identify the time of completion, and change the current trend.Some indicators have been clearly insufficient for the full forecast future changes.Therefore, every novice trader it is necessary to include them in your arsenal and be able to apply in its trade system.
As you know, the trend line is of three kinds:
- upward ("bull trend") - the price increases.When the bull attacks, trying to pierce the enemy and raise their horns up - hence the name.
- The downward ("bearish") - the price falls.Bear is known, aims to lay down the prey, pounce with their weight and the "crush".
- Side ("flat") - the price is moving in a narrow corridor.Usually this is a sign of the decay of the upcoming trend and strong leap upwards or downwards.This often occurs before the release of a very important news.
trend line is a bit like support and resistance levels.However, if these are the kind of foreign, abroad, arranged horizontally on the chart, this line shows the current direction and has some deviation.
Building
trend line on a chart connecting two adjacent peak level.When the pull-down motion quotes, it connects the two adjacent pressure point, and when the pair grows consistently rising level of support (general maximum).Sometimes traders have difficulty with the selection of the extreme values of the price to be used for building.Subjective vision, or issuance of a desired direction for real - for many traders in real trouble.To avoid errors in the construction of the trend line, it is recommended to apply a rule Sperandeo.
According to this method, "Bear" line connects two adjacent lowering the maximum, minimum prior to the bottom mark of the current price movement.Similarly, construction and "bullish" trend line - it passes through successively higher lows, which precede the highest high.As you can see, everything is quite simple and easy to remember.
strategy Forex trend lines
It's time to go to practice.Consider a simple but yet effective strategies to trade any quotation and any older timeframes M5.For example, take the 15-minute chart and a pair EUR-USD.
should first trendline as the current interval, and the two adjacent, larger intervals (in our case - M30 and H1).If the direction is always the same, go to the next step.Open positions will only be the trend when prices approach to our line.
When upward movement focus on the purchase, apply in this case pending orders Buy Stop, put up 5 points above the ground with our line of candles.Thus, in the case of a release it will work and will be open position.
Similarly, trade with the downward movement, when all three of our lines are directed downwards.When prices approach the line, put a Sell Stop order at 5 points below the point of contact with candles trend line.
This strategy is useful trailing - stop.I recommend to pay attention to the Advisor Trailingator, which itself will follow the installation of stop automatically.
