Trend lines

   <<Trend Lines>>

  One of the most used tools on the charts of all markets all over the world is the trend line, as it indicates the market's direction and character, we will know how to draw a true trend line

How to draw a trend line?

  simply surf the chart to find any 2 lows or highs and select the trend tool then match between them, you can check the true mark present beside the "Ray" option (on the trendline properties) to make it extended, remove it to make it stop at the point you stop at.

N.B:- the more tops/lows the trend line is drawn the more power it gains, but at least 2 lows/tops, also the higher the time frame the stronger the trend line will be, for ex. an up trend on the "daily" chart will act more effectively than an up trend on 4H chart.

How to use trend line in trading?

  The most likely method using trend lines is waiting their brake, so this indicates a change in direction and you can enter in the opposite direction of the original trend, other method of usage is to wait until the price is near the trend and notice the price action there, as if it is a support/resistance line, so here you will maybe enter with the direction of the original trend, the following charts will clarify more:

N.B:- in the previous charts the trend line is supported on 5 low so it is very strong, so we expect a powerful movement after its break.

What is meant by retest of the broken trend?

  This is phenomenon oftent happen in forex, simply after breaking the trend (either ascending or descending) the price will reverse again for few pips to test the trend line i.e just touch it, before resuming the direction of break again.

Charts:

N.B:- it is not a condition that each break of trend is followed by a retest of the trend, but it often occur, and when occurred it gives a confirmation of the break, aslo you can divide your lots (sum of money) on 2 parts, one enter after the break immediately, and another after retest of the trend which is further confirmation.