Drawing Trendlines

Trend lines can be drawn horizontally or diagonally, or even along a curvature. Trend lines can form in parallel channels, or at an angle, frequently forming a geometric shape.

Depending on the pattern formed along a trend line, it can be a powerful signal about the subsequent price action.

Trend lines, however, like rules, were meant to be broken. Therefore, they should act as a point where the probability of a reaction increases. This reaction, however, cannot be predicted.

A touch of a trend line could lead to repeated bounces, but on a final touch, price action could break through the trendline causing an explosive movement.

Still, trend lines are critical to successful trade planning.

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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