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[Oluti]

Best Way To Draw Trend Lines
I’m often asked regarding the best way to draw trend lines and how to use them. While it is an essential technical indication, you need to understand that this is not an exact science. There is no one right and perfect way to do it. In this post i would like to address a few points you should consider regarding trend lines.

What is a Trend Line?

Technical analysis is built on the assumption that prices often trend. Trend Lines are an important technical tool that used to identify and confirm trends in the Foreign Exchange market. A trend line is drawn as a straight line that connects two or more price levels and then extends further to act as a region of support or resistance. The purpose of drawing trend lines is to predict and/or identify where a possible change in trend may take place.

Drawing Trend Lines – a Subjective Viewpoint
As i said before, drawing trend lines is not a science. It’s an art that may take some time to master. Everyone has their own unique way of drawing a trend line.Technical signals that indicated by various Forex tools are very subjective. So, traders are entirely free to choose what points to be used to create the line.

Different Ways of Plotting a Trend Line

Traders may never agree to use the same levels in different lines, and some will only connect the closing prices, while others may use a mix of open, close and high prices. What you should note, is that regardless of the exact price levels being connected, you should try to get the most influential line. The strongest trend lines considered to be the ones which their region has been reached the most times by the price action.
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Up-trend and Down-trend Lines

In general, an upward sloping trend line is used to connect prices that act as support, when the given asset is trending upward. It means that an upward sloping trend line is drawn below the price and connects either a period of low levels or a series of closing prices. Conversely, a downward sloping trend line is typically used to connect a period of highs that act as resistance while the particular asset is trending downward. The trend lines tendency is to proceed in the same direction, so use it until proven otherwise. However note that once trend lines are violated they usually change their roles. The up trend line become a line of resistance instead of support, and vice versa.

 

[Professional Writer]

Many traders draw the trend line inaccurately. I think before learning how to draw the trend lines, a trader must understand how to analyse higher highs and lower lows in a proper manner. This is due to the fact that both of these things are related to each other. The trend lines involve accurately measuring and analysing the lower bottoms of candles perfectly aligned in the right kind of position. Having said that drawing trend lines alone would not help a trader. Trading is a tricky thing that involves various other factors as well.

 

[lioralace]

If there's one thing I've learned from drawing trend lines over the years, it's that they're more art than science. I strive for the line that gets the most touches without trying, rather than obsessing over flawless highs or lows. Depending on the chart and the price action, I may use wicks or just closes. For me, consistency and the market's response around that line are the most important factors. I have faith in it if I see price upholding it repeatedly. And when does that line end? Since that shift frequently indicates a change I don't want to miss, I pay close attention.

 

[TOM88]

I've discovered that there is no one-size-fits-all approach when it comes to trend line drawing; it's as much art as science. Connecting the most important price points that price consistently respects is what I find to be really important. I pay attention to the line that the price most frequently touches, whether it be at highs, lows, or closes, because that is where true support or resistance is found. I always remember that a downtrend line caps the highs, and an uptrend line supports the lows. And I keep a close eye on those lines when they break because they frequently switch roles, suggesting a potential change in market sentiment. Although it requires time and practice to master, this is an essential skill in my toolbox.

 

[kerryjoy]

I've drawn trend lines in all directions over the years, and to be honest, there isn't a single "right" way to do it—it's more art than science. I tend to pay more attention to the swing highs and lows that the price most frequently touches because I believe those lines to be more significant. Depending on the personality of the chart, I may connect only the closing prices at times or include the wicks at others. I've discovered that consistency is more important than perfection. I have faith in a trend line if it consistently holds the price in check. And when does that line end? That's my cue to take another look. For me, trend lines are more about directing my market narrative than they are about being exact.