Downward Indices Trading Trend Lines and Channels - MT4 Tools for Drawing Indices Trading Trend Lines and Indices Channels
How to Draw Downward Indices Trading Trend Lines on Stock Indices Trading Charts - Downward Indices Trend Line MT4 Indices Trend Line Indicator
A downward indices trading trend line is drawn above the indices trading downward indices trading trend pattern formed by consecutive lower highs, the downward indices trading trend line must connect at least two highs, with the most recent high being lower. For our indices trading downward indices trading trend examples we shall use the MT4 technical analysis software indices trading charts to illustrate an example of downward indices trading trend.
Since indices trading price moves down in a zigzag manner indices traders normally draw a downward indices trading trend line which shows the general downward direction of the indices trading prices. In Indices trading market technical analysis, this general indices trading price direction is referred to as the TREND by indices traders. In indices trading technical analysis definition we can define this indices trading down indices trading trend line is drawn on a Indices chart showing the resistance levels (bearish market direction).
A indices trading down indices trading trend occurs when the indices trading price makes a series of lower highs and lower lows. Each high is lower than the previous high - lower high, and each low is lower than the previous low - lower low therefore showing bearish indices price movement.
Indices Down Indices trading trend lines gain more validity each time indices price touches the downward indices trading trend line but does not penetrate the indices trading trend line. A indices trading down indices trading trend remains the general direction until this series of lower highs and lower lows is broken.
In indices trading technical analysis, An upside penetration of a indices trading down indices trading trend line is a technical buy indices trading signal, and usually the first indication that the bearish direction of indices trading prices may soon reverse.
Drawing a Downward Indices Trend Line - Downward Indices Trend Line MT4 Indices Trading Trend Lines Indicator
When it comes to learning how to draw and learning indices trading technical analysis of indices trading charts, you need to know that when the indices trading market is bearish it forms lower lows and lower highs forming a downward general market direction. These are the points that are used to draw the downward indices trading trend line.
To draw this indices trading downward indices trading trend setup we use resistances and to do it correctly two resistances are needed. When indices trading price touches this indices trading trend line, then we sell and place stop loss just a few pips above the sloping resistances;
Trading This Downward Indices Trend Market Move - How to Trade Downward Indices Trend Line
When trading with this indices trading trend line trading method, this indices trading trend line setup will show the general direction of the indices trading market as downwards therefore indices traders will only open short sell indices trading trades. These are the levels where if indices price retraces then these points will provide strong resistance. This is why many short sellers will wait until indices price retraces upwards and hits these retracements levels to open sell indices trading trades. Indices trades opened at these levels have a high Risk to Reward Ratio with minimum draw down.
For Example, in the above indices trading example, a indices trader would have opened short sell indices trading signals at the resistance1, resistance2, resistance3 and these sell indices trading trades would have made a lot of profits with minimum amount of draw-down/retracement.
How to Draw a Indices Downward Channel - Downward Indices Channel MT4 Channel Indicator
A indices trading downward channel is drawn by drawing a line that is parallel to the downward indices trading trend line and then adjusting it to touch the bottom boundary of the indices trading price movement. This then forms a downward indices trading channel and as long as the indices price stays between these two channels the general indices trading market direction is intact the indices trading market direction will continue being bearish.
Trading The Downward Indices Channel
The downward indices trading channel is used by indices traders to show levels where it is best to take profits. Indices traders will take some profit once the indices price touches the lower channel and wait for another retracement before opening a short sell indices trade again.
MT4 Tools For Drawing Indices Channels - Downward Indices Channels MT4 Channels Indicator
The indices trading tools to draw these indices trading channels studies on the MT4 indices trading charts are located on the Lines Toolbar within the MT4 indices trading platform, to access this MetaTrader 4 tool bar if it is not activated on your MT4 Indices Trading Platform, Click in "View" Next to "File" at the top left corner of the MT4 Indices Trading Platform and click View, Then Click on Tool bars, Then Check the Lines Toolbar by clicking on it.
Below is the screenshot of these MT4 indices trading tools: just click on this MetaTrader 4 indices channels drawing tool and select the point to where you want to place this indices trading channels tool on the indices trading chart.
MT4 Technical Analysis Charts - Downward Indices Channels
MT4 Toolbar - MT4 Tools for Drawing Indices Trading Trend Lines and Indices Channels used to obtain these indices trading trend line drawing tools is shown above, to draw these indices trading trend line setups or indices trading channels, just select the above MT4 indices trading trend line drawing tools shown on the MT4 indices trading software and select the two points where you want to draw the indices trading downward indices trading trend line.
This indices trading trend line indices trading strategy is one of the simplest and popular indices trading technical indicators used by indices traders to analyze the indices trading market indices trading trend direction.