How to Draw a Indices Trend Line on a Chart
How to Chart Trend Lines for Indices - Drawing Trend-Lines for Stock Indices on Trading Charts
Principles of How to Draw a Indices Trend-line in a Chart
Use candle 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 market trend is defined by higher highs and higher lows.
- The points used to draw a indices trendline on a stock chart are along the highs of the stock price candlesticks in a bearish market. A downward bearish market trend is defined by lower highs and 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 may 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 is not broken, the more powerful its signal.
Example 1: How to Draw a Upward Indices Trend-line on a Chart
To draw an upward indices trendline on a stocks chart use two support areas in a bullish up-ward trend so that to draw the upwards trendline and then extend the trend-line as illustrated below. The upwards trendline on a stock chart will show the general direction of stock trading prices and as long as stock trading price is above this upwards trend-line then the upward trend will remain intact - bullish upwards indices trend.
If prices move below the upwards trendline which is the support level for the bullish upward indices trend then stock traders should close-out all their open stock trade transactions - because this may be a indices trend reversal. In an upwards trend stock trading price should generally stay above support level which is marked & labeled by the upwards trendline on the stock charts.
Draw a Up Indices Trend Line on a Chart in Indices Trade
How to Draw an Upward Trend Line for Indices on a Chart - How to Draw a Trend Line for Indices on a Chart.
Example 2: How to Draw a Downward Indices Trend-line on a Chart
To draw a downward trend-line on a stocks chart use 2 resistance levels in a bearish downwards trend so as to plot the downward trend line & then extend the trend-line just as is illustrated and shown below. The downwards trend-line on a stock chart will show the general direction of stock trading prices and as long as stock trading price is below this downwards trend line then the downward indices trend will remain intact - bearish downward indices trend.
In a downtrend, prices stay below the trend line. That line acts as resistance. If prices break above it, close all stock trades. This could signal a trend reversal. Bears expect prices to hug the line from below.
Draw a Indices Down Trend Line on a Chart in Indices Trade
How Do I Draw a Downward Indices Trend Line on a Trading Chart - How Do I Draw a Indices Trend Line on a Chart
More Topics:
- How is Wall Street 30 Index Traded Online in the MetaTrader 4 Software Platform?
- How Can I Add SWI20 in MetaTrader 4 Mobile Trade App?
- Can You Start Indices with $1,000 for Mini Stock Index Trade Account?
- Entry Limit Indices Order
- Trading Index Price Action 1 2 3 Method Index Price Breakout in Stock Indices
