What Are Trendlines In Forex Trading?

Trend lines are lines drawn on the historical price levels that depict general direction of where the marking is heading, and provide indications of support or resistance.
Drawing trend lines is a highly subjective matter. The best test of whether a trend line is a valid one is usually whether it looks like a good line. In an up trend, a trend line should connect the relative low points on the chart. A line connecting the lows in a longer-term rally will be a support line that can provide a floor for partial retracements. The down trend line that connects the relative highs on the chart will similarly act as resistance to shorter moves back higher.

Any two relative highs or lows will be on the same line, so it is possible to draw a tentative trend line between any two points. Traders can use tentative trend lines as an indication of where support or resistance might be, but until a tentative line holds as support or resistance, it is not yet confirmed as valid.

Of course, the more times a trend line holds, the stronger it will be in the future. If a single line can connect 4 or 5 relative lows, then the chances of the next pullback bouncing off the line are high.

The best trend line?

It is an unusual situation where three points on a chart will exactly coincide with a straight line connecting them. More often, prices will be close to a line, and a best-fit line will have to suffice. This is where trend lines become more art than science. Different traders may draw different trend lines given the same chart or even connecting the same series of relative low points.

Sometimes a trend line will have to be revised as new relative highs or lows appear. Even if the trend line is a very close fit between three or more points, it is important to be flexible and redraw 
trend lines when....Read more

Get 200% Forex Deposit Bonus 

Make deposit into your trading account and get 200% instantly.

 

 Top 28 Forex Training Video- Free

1. What Is Forex?  2.Forex Market Facts  3.What Is Leverage?  4.Currency Pairs Explained  

5. Pips In The Forex Market  6. The Essentials of Margin In Forex  7.Forex Glossary

8.Fundamental Analysis  9. Interest Rates  10. Gross Domestic Product  11.Non Farm Payrolls

12. Stop Loss & Take Profit  13. How Much Risk Should You Take? 14. Support and Resistance

15. Trend Lines 16.Channels 17. Reversal Pattern 18.Double Tops  19. Double Bottoms

20. Triples  21. Head & Shoulders 22. Saucers 23. Continuation Pattern 24. Triangles

25. Ascending & Descending Triangles  26. Rectangles  27. Basic Candle Shapes & Names

28. Trend Changing Candle Arrangements