Forex Trend Lines Basics

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Forex trend lines are also same important as support and resistance lines according to technical analysis. Most of the new traders ignore drawing trend lines. To identify the right opportunity, you should draw trend line accurately. There are three types of trend lines you can draw.

i: Uptrend line
ii: Downtrend line and 
iii: Sideways trend .

Uptrend is drawn by joining the two or more higher lows and downtrend is drawn by joining the two or more lower highs. And sideways trend is simply goes sideways. It is also known as ranging market.

Forex uptrend line chart

There are short term and long term trend according to time frame. When we found three bounces then it will establish a new trend. Otherwise it will not confirm the validation. Normally, five to six bounces we see in a strong trend line. Our target is looking for the opportunity from the third , forth and fifth bounces. Second and sixth bounces may change the direction. The direction always changes to all time frames. If you find any new direction in longer time frame and trade in small shorter time frame , then always trade according to main direction. So that in case if the market goes against you in shorter time frame, you will get the chance to come back the price again according to main trend line.

Forex downtrend line

Suppose, you saw a downtrend after ranging or reversal in H4 or D1 chart,  you simply go to 30M or H1 chart to find an opportunity to sell order. You can take two or three or atleast one opportunity of quality trade opportunity. But when you see in longer time frame the price is near the previous swing low, you should simply remain out side the market. Remember that, this opportunity you will find only active session. Be careful about the news announcement time. The affect of news announcement can be very dangeraous because at the time of announcement of news, all big traders trade according to news and in this time most of the time technical analysis dose not work.

Forex sideways trend line

This article is only for give some idea and you know that the Forex market does not follow the mathematical rules. So it may go against you anytime. So you have to check it how it works in DEMO before jumping to real market. 

Have you read the most important article on basic forex money management plan?