Trend Indicators | Moving Average | Line Chart | EMA

 

Trend Indicators | Moving Average | Line Chart | EMA.

Line Chart

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.

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 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

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 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.

Lower Highs Lower lows

Next Topic Trendline Channels

       Moving Averages

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

 

 

About Muhammad Shahid

Check Also

Two Ways to use TrendLines

HOW TRADE TRENDLINES AND DRAW TRENDLINES

HOW TO TRADE AND DRAW TRENDLINES How trade trendlines, we’re going to cover the basics, …

Leave a Reply