Trend Indicators | Moving Average | Line Chart | EMA

Trend Indicators | Moving Average | Line Chart | EMA.

Trend Indicators – Today’s article is for you. 

By using trend indicators, I am teaching more reliable trading tips and techniques.

 To identify the direction of the trend.

The first tool that you can use to help you to identify the direction of the trend is a line chart.

The line is the simplest type of chart representing the trading instruments closing price on each day.

This type of chart offers traders a clear, easy-to-understand view of the instrument’s price interpretation of line charts.

Line Chart

How to trade with trendlines

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.

Trend Indicators

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.

Desending and Asending Triangle

Similarly, Another simple approach is to look for trading patterns.

 Chart patterns are among the most powerful 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.

We can see several continuations patterns by descending triangle and an

ascending triangle.

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 information.

For this reason, other complementing tools must add.

Price Action technique

We use price action to identify the direction of the trend for that we merely 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.

Crowd Behaviour

You can see that you have a series of higher highs and higher lows that show an upwards trend and if you see a series of lower highs lower lows that show a downward trend.

Lower Highs Lower lows

 

Next Topic Trendline Channels

       Moving Averages

       (200 EMA, 100 EMA, 50 EMA, 20 EMA)

 

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About Muhammad Shahid

My name is Muhammad Shahid, MBA in Finance from IBA, University of Sindh, Professional Forex Trader & Trainer, I have taught more than 850 Students throughout the Sindh.

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