How To Use Trendline To Spot Convergence

In this post Iam going to explain how to trendlines to determine the possible end of a retracement and to spot the best point to join the prevailing the market trend.I am also going to apply this to this week`s charts and decide the best entry and exit points for this week.
I am not going to explain what trendline is again as I have written enough posts on that.Meanwhile, this trendline video is very helpful.So I am going straight to the point.Trendline is an effective technical tool. It is can be used conservatively or creatively. Itend to use it creatively as occasion serves me.

Let us look at what is happening in the EURUSD market.

From the EURUSD daily chart above, it is obvious that the current trendline is bearish.However, we can still see that price is rising up gradually to perhaps to test the trendline.Even though we are clearly in a downtrend as shown by the trendline, we may not be buoyant enough to sell at this point. We therefore need another reasons to justify our decision.Hence we switch to a lower time frame, 4hour chart to be precise.

The EURSD 4hour chart above shows that the current trendline is bullish.Now there is a conflict between trendlines on daily and 4hour charts of the same currency.What do we do now? We will keep our eyes on the 4hour chart and watch for a breakout below the trendline.We will then sell the breakout.Since  I am selling, my take profit level should be the next significant support.The same approach applies to uptrend.

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