Indices Trade Support and Resistance Zones using Trendlines
How to Trade Support and Resistance using Indices Trend Lines Tutorial
Support & resistance levels on stock indices charts might sometimes form in a diagonal way especially when the prices are heading in a upwards trend or downward stock indices trend.
In a upward indices trend the support levels for the stock indices price will form in a diagonal way that's sloping upwards - and from this upwards sloping diagonal support levels stock indices traders can then draw upward indices trendlines and use these upward indices trendlines to find the support levels.
In a downward indices trend the resistance levels for the stock indices price will form in a diagonal way that's sloping downwards - and from this downwards sloping diagonal resistance levels stock indices traders can then draw downward indices trend lines and use these downward indices trend lines to find the resistance areas.
How to Trade Support Zones Using Upwards Indices Trend Lines
An upward indices trendline is drawn below the upward trend pattern formed by consecutive higher low, the upward trendline must connect at least two stock indices price lows, with the most recent stock indices price low being higher.
Since stock indices price moves upward in a zigzag manner indices traders normally draw a upwards indices trendline which shows the general upward movement of the indices prices - In stock indices technical analysis we can define this upwards trendline is drawn on a indices chart showing the support zones (upward stock indices price direction).
How to Trade Support Zones Using Upward Indices Trend Lines
To draw this upwards trend we use support levels and to draw upwards indices trend correctly two support zones are needed. When stock indices price touches this upwards trendline, then indices traders will open buy stock indices trades and place indices stop loss trading orders just a few pips below the sloping support levels - shown by the upward trendline:
How to Trade Support & Resistance using Indices Trendlines Guide
How to Trade Resistance Areas Using Downward Indices Trend Lines
A downwards indices trendline is drawn above the downwards indices trend pattern formed by consecutive lower highs, the downward indices trendline must connect at least 2 stock indices price highs, with the most recent stock indices price high being lower.
Since stock indices price moves downward in a zigzag manner indices traders normally draw a downward indices trendline which shows the general downward movement of the indices prices - In stock indices technical analysis we can define this downwards trend-line is drawn on indices chart showing the resistance zones (downwards stock indices price direction).
How to Trade Support & Resistance using Indices Trendlines Guide
To draw this downwards trend we use resistance levels and to draw downwards indices trend correctly two resistance levels are needed. When stock indices price touches this downwards trend line, then indices traders will open sell stock indices trades and place indices stop-loss orders just a few points above sloping resistance levels - shown by downward trend line:
How to Trade Support & Resistance using Indices Trendlines Guide
Indices Trade Support and Resistance Zones using Indices Trend Lines
