How to Read Market Trends

Read Stock Indices Chart Trends

To read a indices market trend you need to first of all learn what's a indices trend & how you can spot a stock indices trend on a indices price chart.

The first thing that you need to know about a indices is that is the general direction of indices prices either upwards or downwards. The indices trend is the study & analysis of stock indices price movement upward or downwards.

Trading indices prices generally move within what is commonly known as a stock indices trend. Indices price movement can either move in a downwards trend direction or an upwards trend direction.

To study indices trends -indices traders use indices trendlines to show the general direction of the stock indices trend.

A indices trend can be upward -therefore indices traders will draw an upward indices trend line on the stock indices chart

A indices trend can be downward -therefore indices traders will draw a downward indices trend line on the stock indices chart

An upward indices trendline is a diagonal sloping line that slopes upward thus its name - upwards indices trend line

An downward indices trendline is a diagonal sloping line that slopes downward thus its name - downwards indices trend line

Guidelines for Drawing a Indices Trend Line

To draw a indices trend line -indices traders will need to follow the guidelines for drawing a indices trendline

At least 2 charts points are needed to draw a indices trendline - when third point touches the trend line without going through the trend-line then the trend-line is then considered as valid.

The direction of the trend line either upwards or downward will define the direction of the trend - direction can either be upward indices trend line or downwards indices trend line.

Indices prices should move within this trend line & indices prices should not go past the trendline. As long as stock indices price is within the trendline then market trend is still intact.

The trading indices prices should move along the direction of the trend until such a time when the trend line is broken. Once trend-line is broken then indices traders will analyze this as a possible indices trend reversal stock indices signal because indices prices aren't moving along the support zones or resistance areas provided by the trend line and thus this might mean that the indices trend is no longer holding.

Drawing an Upwards Indices Trend Line - How Do You Read Market Trends?

When the stock indices price moves upward it forms higher highs & higher lows forming an upwards stock indices price movement. An upwards indices trendline can then be drawn by connecting these stock indices price higher lows.

To draw this upward trend-line - we use support levels. To plot the upward trend-line correctly two support zones are needed.

How to Read An Upward Indices Trend Line - How to Read Stock Indices Chart Trends - How to Read Indices Price Trends?

Drawing a Downwards Indices Trend Line

When it comes to learning how to draw & learning indices technical analysis of stock indices charts, you need to know that when the stock indices price is moving it forms lower lows and lower highs forming a downwards stock indices price direction. These are points that are used to plot the downward indices trend line.

To draw this downward trend - we use resistance levels & to draw a downwards indices trend correctly 2 resistances are needed.

How to Read a Downward Indices Trend Line - How to Read Market Trends - How to Read Stock Indices Market Trends?

How to Read Market Trends - How to Read Stock Indices Market Trends - How to Read Stock Indices Chart Trends - How to Read Indices Price Trends