Upward Trend Lines and Channels

An upwards trendline is plotted below the trend pattern by connecting at least two lows. This upward trend line will draw a line that show the general direction of the market.

The diagram below shows how stock price moves when it is moving in a bullish market. The stock price will move upward forming support zones.

Since the stock trading market moves in a zig-zag manner traders normally draw a trend line which displays the general upwards direction of the market.

A up trend occurs when the fore stock trading price will form consecutive higher highs & higher lows. Each price high is higher than the previous high - higher high, & each low is higher than the previous low - higher low.

Up trend lines gain more validity every time stock price touches this up-wards trendline but does not penetrate it. A up trend remains in place until this sequence of higher highs and higher lows is broken.

A down-side penetration of an upward trendline is a technical sell signal, and usually the first indication that an upward trend might soon end.

Drawing an Up-ward Trend Line

When the stock trading market moves up-wards it forms higher highs & higher lows forming a bullish market movement - Upwards Trend. An upward trendline can then be drawn by connecting these higher lows.

To draw this up-wards trendline setup we use supports. To draw the up-ward trendline correctly two support zones are needed. When price touches the up-ward trend line we buy and place stop loss stock orders just a few pips below the upwards trend line. Diagram below shows an example of an upward trend line.

The upwards trend line setup will show the general direction of the market as bullish therefore traders will only open buy long stock trades as long as stock price is within this upward trend bullish market setup and within the support areas. These support levels are the levels where if the stock trading market retraces then these points will provide strong supports for the price. This is why many buyers will wait til stock price retraces downwards & hits these retracements levels market the upward trend-line to open buy stock trades. trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.

In the above up-ward trend line stock trading setup the trader would have opened buy/long stock trades from the signals generated at the support1, support2, support3 and these stock trades would have made a lot of profits with minimum amount of draw-down/retracement.

Upward Stock Channel

An upward channel is plotted by plotting a line that's parallel to the upward trend-line and then adjusted to touch the top boundary of the stocks price movement. This then forms an upward indices channel and as long as the stock trading price stays between these two market trend channels the bullish market movement will continue to move upwards.

Trading the Stock Channel

This upwards channel is used by stock traders to show levels where it's best to take profits. Traders will book some profit once the stock price touches upper channel & wait for another retracement before opening a long buy trade again.

Trend Lines MT4 Trend Line Indicator

The MT4 Trendline Indicator drawing tools to draw these trend lines & indices channels setups on the MetaTrader 4 are located on the MT4 drawing tool bar within the MT4 platform, To get this MetaTrader 4 tool bar if it is not activated on your trading software, Click on "View" Next to "File" at the top left corner of MT4 platform & click View, Then Click on Toolbars, Then Tick "Lines Toolbar" by clicking on it.

Shown Below is screenshot Image of the MT4 drawing tool-bar. To draw a trend line on a stock chart click this MT4 trendline plotting tool and select the point where you want to plot the trend line.

This is one of learn technical analysis lesson among the many learn indices tutorials on this website located on the side navigation menu, where you will learn how to draw trend lines & analyze these trend lines setups.