Drawing Trend Lines

As noted, when drawing trend lines, ensure they are connected across multiple touch points. Even if the trend line is penetrated at some points, so long as there are enough touches, it can still remain valid.

Trend lines again are subjective. Many traders prefer to draw trendlines across wicks only, while others prefer the candle body close. 

Others use a combination based on instinct and experience. No way is more wrong or right than others. However, more validity is given to closes outside of trend lines connecting candle bodies.

Trend lines can be used as a point to place orders, and take a position. Stop losses would be placed below or above the trend line, depending on the trend direction. It would then take a break of the trend line for the stop to be hit.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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