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Tuesday, December 24, 2013
Understanding the best ways to draw a trend line is extremely crucial for a trader. The following are the steps to draw a trend line. Locate the Swing Highs and Lows - Generally trend lines are produced by joining the highs or lows of a chart. When you sign up with all the highs, you will be drawing a resistance line and when you join all the swing lows, you will be drawing a support line. For that reason the first step to drawing a best trend line depends on the finding of swing highs and lows. A swing high is produced when there is 2 or more lower candles on the left and right side of a high candle and a swing low is just the reverse.
So when you are planning to draw a trend line, you got to look for all the highs and lows in your chart. Make Priority - Not all highs and lows are equally crucial, so you should be able to separate the more significant ones from those less significant ones. When it comes to the swing high, the lower candles it carries both sides of a higher candle, the more significant that swing high is and the exact same uses to the swing lows. From the swing highs and lows that you have located in step 1, you can now prioritize them as per to their significance.
The last step will be drawing a line that joins most of the swing highs or lows so regarding get the best trend line that you want. If the line that you draw had a great deal of highs or lows, it means that it is an extremely strong line and you will discover the rate appreciating it quite often. Having the ability to draw a best trend line is extremely helpful for your trading and it is something that is worth your time and effort to learn. For more information follow this link.