Trend Lines

In forex trading, trend lines are the most often used type of technical analysis.

They're also one of the most obscure.

They can be as exact as any other approach if drawn correctly.

Most forex traders, unfortunately, draw them improperly or try to make the line represent the market instead of the other way around.

In its most basic form, an uptrend line is drawn along the bottom of clearly defined support zones (valleys).

This is referred to as a rising trend line.

In a downturn, the trend line is drawn around the top of clearly defined resistance points (peaks).

This is referred to be a descending trend line.

What is the most effective method for drawing trend lines？

Simply connect two large peaks or bottoms to create a proper forex trend line.

So, what's next？

Nothing.

Is that the end of the storey？

It's as simple as that.

Here are some examples of trend lines in the real world. Those waves are incredible!

Trends of Various Kinds

Three types of trends can be identified:

• Lower highs indicate a downward trend.

• Uptrend (lower lows)

• The current trend is in the wrong direction (ranging)

Here are some important things to remember while using trend lines in forex trading:

At least two tops or bottoms are required for a respectable trend line, but a trend line must be verified by THREE tops or bottoms.

The STEEPER a trend line becomes, the less trustworthy it becomes and the more likely it is to break.

The more they are tested, trend lines, like horizontal support and resistance levels, become stronger.

Last but not least, NEVER try to force trend lines to fit the market. That trend line isn't genuine if they don't match together properly!