How to Draw Indices Trend Lines Correctly

Indices Trading Step by Step Guide on How to Draw Indices Trend Lines Correctly - Detailed Guide on How to Draw Indices Trend Lines Correctly

Principles of How to Draw Indices Trend Lines Correctly

1. Use candlestick indices charts

2. The points used to draw are along the lows of the stock indices price bars in a bullish stock indices market. An upward bullish indices trend is defined by higher highs and higher lows.
3. The points used to draw are along the highs of the stock indices price bars in a bearish stock indices market. A downward bearish indices trend is defined by lower highs and lower lows.
4. The points used to draw indices trend lines are extremes points - the high or the low indices price. These extremes are important because a close beyond the extreme tells indices traders the indices trend of the indices trading instrument might be changing. This is an entry or an exit indices signal.
5. The more often a indices trend line is hit but not broken, the more powerful its indices trend signal.

Example 1: How to Draw Indices Upward Indices Trend Line Correctly

To draw an upward indices trend line correctly use two support points in a bullish upward indices trend so as to draw the upward indices trend line and then extend the indices trend line as shown below. The upward indices trend line will show the general direction of stock indices prices and as long as stock indices price is above this upward indices trend line then the upward indices trend will remain intact - bullish upward indices trend.

If indices prices move below the upward indices trend line which is the support level for the bullish upward indices trend then traders should close all their open stock indices trades - because this might be a indices trend reversal indices signal. In an upward indices trend stock indices price should generally stay above the support level which is marked by the upward indices trend line.

How to Draw Indices Trend Lines Correctly for Upward Indices Trend

How to Draw Indices Upward Indices Trend Line Correctly - How to Draw Indices Trend Lines Correctly

Example 2: How to Draw Indices Downward Indices Trend Line Correctly

To draw a downward indices trend line correctly use two resistance points in a bearish downward indices trend so as to draw the downward indices trend line and then extend the indices trend line as shown below. The downward indices trend line will show the general direction of stock indices prices and as long as stock indices price is below this downward indices trend line then the downward indices trend will remain intact - bearish downward indices trend.

If indices prices move above the downward indices trend line which is the resistance level for the bearish downward indices trend then traders should close all their open stock indices trades - because this might be a indices trend reversal indices signal. In an downward indices trend stock indices price should generally stay below the resistance level which is marked by the downward indices trend line.

How to Draw Indices Trend Lines Correctly for Downward Indices Trend

How to Draw Indices Downward Indices Trend Line Correctly - How to Draw Indices Trend Lines Correctly