Trend lines or trends are one of the most common and widely used technical analysis methods.
And I'll try to explain it in a simple and easy way to make the most of it.
Trend lines are support and resistance levels, but they are not stable, so when the price takes a direction, these lines give good entry opportunities as the price changes up or down.
The trend line is negotiable after touching the left hand for the third time so that it is confirmed as a moving support
Now we take examples so that we can understand more.
Example 1
A pair of Australian Yen on the four-hour frame and a bullish trend line and every time the price touches the trend line it is a good opportunity to enter into long positions
The stop loss is below the trend line and profit taking is at the nearest peak or price resistance
Example 2 EURUSD, the half-hour frame, a falling trend line, and every time the price touches the line, it heads down
Sell and stop loss deals will be above the trend and take profit at the nearest bottom or support
Example 3
Continuing with the previous example, we take the idea of breaking the trend as a useful way to know the trend change.
When the trend is breached, it will change from a bullish to a bearish, and vice versa
When the price here broke the trend line up, the trend changed and became an opportunity to enter long positions
Either from direct fracture or from re-testing, as we see on the shown circuits.
We also see the formation of another bullish trend line after the breached downward movement to confirm the change of trend
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How to take advantage of trend lines
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