How to Draw a Indices Trend Line on a Chart
How to Draw a Indices Trendline on a Chart - How to Draw Indices Trend Lines on Stock Indices Charts
Principles of How to Draw a Indices Trendline on a Chart
Use candlestick stock charts to draw indices trend lines
- The points used to draw a indices trendline on a stock chart are along the lows of the stock price bars in a bullish market. An upward bullish trend is defined by higher highs & higher lows.
- The points used to draw a indices trendline on a stock chart are along the highs of the stock price bars in a bearish market. A downwards bearish trend is defined by lower highs & lower lows.
- The points used to draw indices trendlines on the stock charts are the extremes points - the high or the low indices price. These extremes are important because a close beyond the extreme chart points tells traders the trend of the indices instrument might be changing. This is an entry or an exit indices trade signal.
- The more often a indices trendline on a stock chart is hit but it's not broken, the more powerful its trend signal.
Example 1: How to Draw a Upward Indices Trendline on a Chart
To draw an upward indices trendline on a stock chart use two support points in a bullish up-wards trend so that to draw the upward trend line & then extend the trend line as illustrated and shown below. The upwards trendline on a stock chart will show the general direction of stock trading prices & as long as stock trading price is above this up-wards trendline then the upward trend will remain intact - bullish upward indices trend.
If prices move below the up-wards trendline which is the support level for the bullish upward indices trend then stock traders should close all their open stock trades - because this may be a indices trend reversal signal. In an upwards trend stock trading price should generally stay above support level which is marked by the up-wards trendline on the stock charts.
Draw a Up Indices Trend Line on a Chart in Indices Trading
How to Draw an Upward Indices Trendline on a Chart - How to Draw a Indices Trendline on a Chart
Example 2: How to Draw a Downward Indices Trendline on a Chart
To draw a downwards trendline on a stock chart use two resistance points in a bearish down-wards trend so as to plot the down-wards trendline & then extend the trendline as shown below. The downwards trendline on a stock chart will show the general direction of stock trading prices & as long as stock trading price is below this downwards trend line then the downward indices trend will remain intact - bearish downward indices trend.
If prices move above the down-wards trendline which is the resistance area for the bearish downwards trend then traders should close all their open stock trades - because this may be a indices trend reversal signal. In an downward indices trend stock trading price should generally stay below the resistance area which is marked by the down-wards trendline on a stock chart.
Draw a Indices Down Trend Line on a Chart in Indices Trading
How to Draw a Downward Indices Trendline on a Chart - How to Draw a Indices Trendline on a Chart
What's a Trade Plan? - Written Plan Example Template
Alternatives: Automated EA Trading or Copy and Paste Signals
