How to Draw a Indices Trend Line on a Chart
How to Draw a Indices Trend Line on a Trading Chart - How Do I Draw Indices Trend-Lines on Stock Indices 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 bars 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 & shown 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 Do I Draw an Upward Indices Trend Line on a Chart - How Do I Draw a Indices Trend Line 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.
If prices move above the downward trend-line which is the resistance level for the bearish downward trend then traders should close-out all their open stock trade transactions - because this may be a indices trend reversal. In an downward indices trend stock trading price should generally stay below the resistance area which is marked & labeled by the down-ward trend line on a stock chart.
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
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