How To Draw Trendlines Step By Step
In this video I show how to draw trendlines, what not to do and how you can use trendlines then to make better trading decisions.
We will talk about such a well-known technical analysis tool as a trend line.
Let's imagine we return to the beginning of the twentieth century, in the era of the formation and development of the theory of Charles Henry Doe, which served as the beginning of technical analysis. In those days, inclined trend lines (along with horizontal lines) were the only tool that allowed for market analysis. More than a hundred years later, this tool has not lost its popularity and remains a powerful weapon in the hands of the modern trader.
I believe that any trader, regardless of which market (stock, currency, commodity) he trades, is simply obliged to correctly build trend lines and trade on them.
A trend line is a technical analysis tool whose main purpose is to identify a trend in the market. As well as identification of the moments of deceleration, change of direction and reversal of the current trend.
In simple terms, a trend line is needed in order to determine what trend is now (bullish or bearish, or maybe the market is in sideways movement now)? How strong / weak is the current trend? Is it possible to change the direction of price movement and when?