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.

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