Trend Indicators | Moving Average | Line Chart | EMA.
Trend Indicators – Today’s article is for you.
If you are the type of trader that is always really struggling to identify the direction of the trend by trend indicators.
So for that, I’m sharing with you five trading tips and techniques to
identify the direction of the trend.
The first tool that you can use to help you identify the direction of the trend is a line chart.
The line chart is the simplest type of chart representing the trading instruments
closing price on each day.
This type of chart offers traders a clean easy to understand the view of the instruments price interpretation of line charts.
How to trade with line charts.
The simplest method is to draw tradelines on the line charts.
That connecting support points for an uptrend and resistance points for a downtrend.
But the trend line may rise or fall and move sideways.
However, trend lines connect two or more support or resistance points that define the trend.
The trend line is something like support and resistance but the only difference is
that a trend line is diagonal.
In this case of upward, It tells us the direction of the trend that trendline is pointing higher lows.
it’s sloping is upwards and tells the strength of the trend and that is the upside.
In this case of downward, It tells us the direction of the trend that trendline is pointing Lower highs.
it’s sloping is downwards and tells the strength of the trend and that is the downside.
Similarly, Another simple approach is to look for trading patterns.
chart patterns are one of the most effective trading tools used by traders to identify continuation or reversal signals to open positions.
And identify price targets line charts offer good visualization of the patterns.
if you pay attention to the above Picture.
We can clearly see several continuations patterns by descending triangle and an
We can also see one reversal pattern the head and shoulders indicating a possible
reversal of the underlying trend.
The line chart should not be used by itself and it doesn’t provide enough price
For this reason, other complementing tools must be added.
Price Action technique
We use price action to identify the direction of the trend for that we simply locating
the swing high and swing lows in the line chart.
So you know in an uptrend it consists of higher highs and higher lows.
You can see that you have a series of higher highs and higher lows that show an upwards trend.
if you see a series of lower highs lower lows that show a downward trend.
Next Topic Trendline Channels
(200 EMA, 100 EMA, 50 EMA, 20 EMA)