Upward Indices Trend Lines and Channels

An upward indices trend line is drawn below the indices trend pattern by connecting at least two lows. This upward indices trend line will draw a line that show the general direction of the stock indices trading market.

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

Since the stock indices trading market moves in a zigzag manner indices traders normally draw a indices trend line which shows the general upwards direction of the stock indices trading market.

A indices up trend occurs when the fore stock indices price makes consecutive higher highs and higher lows. Each high is higher than the previous high - higher high , and each low is higher than the previous low - higher low.

Indices Up indices trend lines gain more validity each time stock indices price touches this upward indices trend line but does not penetrate it. A indices up trend remains in place until this series of higher highs and higher lows is broken.

A downside penetration of an upward indices trend line is a technical sell indices trading signal, and usually the first indication that an upward indices trend may soon end.

Drawing an Upward Indices Trend Line

When the stock indices trading market moves up it forms higher highs and higher lows forming a bullish market movement - Upward Indices Trend. An upward indices trend line can then be drawn by connecting these higher lows.

To draw this upward indices trend line setup we use supports. To draw the upward indices trend line correctly two support levels are needed. When stock indices price touches the upward indices trend line we buy and place stop loss stock indices orders just a few pips below the upward indices trend line. The diagram below shows an example of an upward indices trend line.

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

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

Upward Stock Indices Channel

An upward indices channel is drawn by drawing a line that is parallel to the upward indices trend line and then adjusted to touch the top boundary of the stock indices price movement. This then forms an upward indices channel and as long as the stock indices price stays between these two channels the bullish market movement will continue moving up.

Trading the Stock Indices Channel

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

Indices Trend Lines MT4 Indices Trend Line Indicator

The Stock Indices MT4 Trend Line Indicator drawing tools to draw these indices trend lines and 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 indices trading platform, Click in "View" Next to "File" at the top left corner of the MetaTrader 4 platform and click View, Then Click on Tool bars, Then Check the "Lines Toolbar" by clicking on it.

Below is the screenshot Image of the MetaTrader 4 drawing tool bar. To draw a indices trend line on a stock indices chart just click on this MetaTrader 4 indices trend line drawing tool and select the point where you want to draw the indices trend line.

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