Trendlines

Trendline

Trendlines are one of the many tools and indicators used in Forex Analysis. Included with trendlines, many forex traders incorporate other technical indicators such as moving averages, MACD and Bollinger bands, Stochastic and hundreds of other forex indicators in their forex trading strategies to aid them in their trading decisions. Trendlines are not indicators and should not be confused other forex indicators. Its is a line is used to connect a minimum of 2 points are on a price chart. Click this link how to draw trendlines if you want to know how to draw trendlines the right way.

Using Trendline in Technical Analysis

The number of indicators used in forex technical analysis is so huge that is really mind boggling…especially if you are new forex trader. But in reality, on average, a forex trader would need about 3 indicators to trade the forex market and the most popular used forex indicator topping the list is moving averages.

You success in forex trading is also depends on your having a good knowledge of technical analysis and combining these forex indicators with trendlines in analysing charts is what many forex traders do everyday.But there is also a great danger that too much analysis causes analysis paralysis. One main reason why this happens is cluttering your trading charts with too many indicators.

Trendlines are simply one of the most effective forex trading tools you can ever use as a forex trader in trading the currency market. You see, price travel in lines. Ok, this line may not be always straight sometimes, but it travels in a form of a line. It is this behaviour of price that makes trendlines very handy in forex technical analysis.

Trendlines come in very handy when you want to draw the following popular chart pattern on price charts:

• Price Channels
• Triangular Patterns
• Wedges
• Flags and Pennants

All these price patterns can easily be identified when you draw and use  a trendline. Moving average, or any other forex indicators used in technical analysis won’t identify such patterns, only trendlines will allow you to draw lines and analyse your chart in such a manner that you will see these patterns forming and this will allow you to take the necessary actions to profit from these forex chart patterns.

If you have been trading forex for a long time, you will notice that using trendlines to analyse charts is one of the best tools in technical analysis.

If you have not been using trendlines properly, it is about time you start learning about how to, because a trendlines are one of the powerful tools you can ever use in technical analysis to help you in your trading decisions.

……………………………………………………………………………………………………………………………………………………………………

Related Articles:

…………………………………………………………………………………………………………………………………………………………………….

One Response to “Trendlines”

Leave a Reply

*