How To Draw Trend Lines?
To draw a quality trend line, you will need to find at least 2 minimum swing points, and simply connect them with each other. The levels must be clear, don’t try to force a trend line.
Don’t use smaller time frame to draw trend lines, use always the 4H and the daily time frames to find obvious trend lines.
We will try to focus right now on how to draw them in a trending markets, our purpose is to identify the beginning of impulsive moves in a trending market.
In the next chapter, i will explain you in detail how to trade trend lines in combination with our price action trading setups.
See an example of how to draw trend lines in a downtrend market.
As you can see the market respects the trend line, and when price approach it, the market reverse and continue in the same direction.
When the market moves this way, trend lines help us to anticipate the next impulsive move with the direction of the market.
Look at another example of an uptrend market.
As you can see the market respects the trend line, and by drawing it the right way, we can easily predict the next movement upward.
This is all what we can say about trending markets, i think it’s clear and simple, now what i want you to do is to open your charts and try to find trending markets.
Find previous swing points (support and resistance), and try to find trend lines as well.
This exercise will help you understand how trending markets move. And how to predict high probability entries in the market.