Over the past few months, I’ve shared with you some advanced trend line strategies…

Resembling the several types of trend lines…

And a trend line breakout strategy…

But what if advanced evaluation isn’t really your thing?

Perhaps all you would like is a fast and snappy guide on use trend lines – right?

If that’s the case, then you definitely’re reading the fitting article!

On this trend line guide, you’ll learn:

• What a trend line is, and the way (and why) it really works across most markets
• Learn how to use trend lines to generate low-risk and high-reward trading ideas
• The straightforward option to enter, manage, and exit your trades using trend lines
• Just a few tips on what NOT to do when learning use trend lines

Are you ready?

Then let’s start!

Learn how to use trend lines: what they’re and the way they work

Let me share with you something which helped me unlock my studies…

The key to learning any latest trading concepts out there may be to first understand WHY things occur.

The WHAT comes later.

So, as an alternative of asking:

“What’s the most effective moving average period?”

It’s higher to ask:

“Why do I would like to pick out this moving average period?”

It’s the identical idea if you approach trend lines.

As an alternative of asking what the most effective trend line strategy out there may be, it’s best to ask:

“Why does the trend line work in the primary place?”

So, let’s dive into that query.

How trend lines work within the markets

As you understand, there are several types of trends.

There are strong trends…

Healthy trends…

And weak trends…

Simply speaking, what trend lines do is discover areas of value…

In response, we discover market opportunities on trends as they present themselves!

You don’t predict with them… as an alternative, you employ trend lines to react to current market conditions.

Make sense?

Now that you understand the “why” behind trend lines…

Let’s start with the fundamentals of actually use them.

Learn how to plot trend lines in your chart

The truth is that, as with all tool, it takes practice to learn use it properly.

So, there will probably be times if you might plot trend lines the unsuitable way (and that’s okay!).

Nonetheless, a trend line is valid when there are two swing points out there.

For instance…

In an uptrend, you’d need to give attention to the lows…

Once it made two swing lows then that’s the time when you wish to “project” where the following swing low could be…

For downtrends, nonetheless…

…it’s swing highs which are something you’d need to give attention to as an alternative (and never the swing lows)…

It seems pretty easy, right?

Think you’ve got it?

Well, let’s have a fast workshop first.

Take a look at these charts…

Where do you’re thinking that the trend lines needs to be?

…I’ll provide you with a moment to look again.

So listed here are mine…

I’ll provide you with more suggestions later about plotting trend lines.

Unnecessary to say, in case your plots kind of match my example, then you definitely’re a professional at this already!

Now that you understand why the trend line works and what to take note when plotting it…

Let’s dive deeper!

Learn how to use trend lines to accurately analyze the markets

Here’s the reality:

Trend lines are the simplest and versatile tool to make use of when trading the markets.

Nonetheless, even easy tools can have a variety of tricks up their sleeves.

And it’s those tricks that I’ll share with you on this section.

First…

Identifying trend strength

This method is straightforward.

Remember what I told you about using swing highs or lows to plot your trend lines?

Good!

One option to discover if the trend is accelerating to the moon is when its swing lows are sloping higher.

Here’s what I mean…

Breaking it down for you…

The moment you plot your valid trend line and the market makes a third swing low…

…plot one other trend line from the 2nd swing low…

If the trend line is constantly sloping, then this tells you that the trend is accelerating.

Now, the rationale why this is vital is that, in an accelerating trend:

• The value can shoot up even further
• Pullbacks rarely occur
• But at the identical time, sharp crashes are still possible!

Here’s an example…

Alternatively, the alternative can occur when swing lows start sloping lower…

This means that the trend is weakening and potentially forming a spread market.

Make sense?

Now, before we move on, it’s crucial that you simply all the time set your charts to the logarithmic scale…

This deserves an entire latest guide for itself, but principally, being on a logarithmic scale helps you take a look at the chart more objectively!

For comparison, here’s a chart which is just not using a Logarithmic scale…

And here’s the identical one which does use a logarithmic scale…

It makes an entire lot of difference, right?

Swing lows and highs are rather more visible, which could be huge when learning use trend lines.

Now, one other concept on use trend lines to investigate the market is…

Timing trend reversals out there

I do know what you’re pondering:

“Aha, a trend reversal!”…

Yet, one candle alone isn’t enough to reverse the entire trend.

Why?

Well, because false breaks occur on a regular basis out there!…

So, how should we properly define trend reversals by utilizing trend lines?

The reply is thru the additional confirmation!…

That’s right!

Waiting for a bear flag pattern after which a breakout of that pattern is sufficient to tell us that the market structure has modified!…

Here’s what it looks like on long setups…

Got it?

Great!

Now that you would be able to understand WHY trend lines FORM, and HOW to make use of them to ANALYZE the market…

What’s next?

Or relatively… what’s missing?

The reply is – use trend lines to PROFIT from the market, in fact!

So, let me show you more in the following section…

Learn how to use trend lines to enter, manage, and exit your trades

What use is any trading concept if it doesn’t enable you to trade higher?

In any case, doing evaluation is vastly different from the actual churn and flow of real markets!

But before I start…

Take note that these concepts have been simplified somewhat…

…so as that you would be able to use them to enhance your current strategy.

Now let’s start!

Learn how to use trend lines to enter pullbacks

This might be the oldest trick within the book!

Take a take a look at what I mean.

Simply wait for the third touch!…

See it? Okay… but… when exactly do you hit the buy button?

It’s a matter the books only vaguely answer, right?

But, here’s how:

First, wait for the worth to shut below the trend line…

…and once the worth makes a bullish candle close…

…then, you enter at the following candle open!…

This is definitely a universal option to enter common chart patterns and trend lines.

The more you understand, right?

Now you’re probably pondering:

“But what will we do when the trend is sloping like our previous examples?!” …

Great! You’re being attentive, I see!

On this case, you’d should learn use trend lines on breakout trades…

…which leads me to the second concept!

Learn how to use trend lines to enter breakouts

I do know that I’ve been teaching you use trend lines to objectively take a look at trends.

But this time…

I’ll teach you ways trend lines will also be used to objectively take a look at pullbacks!

(to maintain things easy, I’ll keep calling them trend lines as an alternative of “pullback lines”)

So, when you’re in an uptrend…

Place your trend line on the highs of the pullback…

(Mind you, pullbacks can are available in different sizes and styles, in addition to trends!)

…and the moment it makes a bullish close…

…then it’s a breakout!

So – what you do next is – enter the following candle!…

Again!

Just like plotting trends, it may well take a while to nail down plotting trend lines on pullbacks as pullbacks can vary….

Nevertheless, mastering this offers you the flexibility to search out opportunities each in pullback and breakout!

Alright – how about I show you some exits?

Learn how to use trend lines to take your profits

Remember the trend reversal setup I showed you some time ago?…

Good!

Because, assuming you’re within the trade, we don’t want that flag pattern.

That might take up a variety of time and lots of hurt!

As an alternative, once the worth closes below your trend line…

…then you definitely exit at the following candle open!…

Within the last section, I’ll teach you ways you possibly can improve on this.

But – essentially – that’s all there may be to it!

You now know use trend lines to assist enter and exit your trades!

So, now that you understand how versatile trend lines could be in your arsenal…

It’s crucial you understand how NOT to make use of trend lines.

Because, as your coach, I’m not here to hype you up with fancy concepts and techniques…

It’s my job to enable you to use these ideas properly!

Learn how to use trend lines the WRONG way (avoid doing these)

Let’s get straight to the purpose…

The primary sin in learning use trend lines is to plot an excessive amount of….

Plotting too many trend lines:

That’s a LOT of noise!

I do know that it’s exaggerated, but you get my point.

So… what number of trend lines do you have to put in your chart?

Often, not greater than three.

Why?

Since you’d only need to put trend lines which are relevant to the present price!…

As you possibly can see, now we have one trend line identifying the trend, and one other identifying the pullback.

That’s two, and every with a well-defined purpose!

So principally…

You’re free to plot as many trend lines as you want… AS LONG AS:

• It’s relevant to the present price
• You should utilize the knowledge on those trend lines to administer your trades higher

Don’t overplot!

Now, the following thing it’s best to not do with trend lines is…

Treating trend lines as a single line in your chart

This idea changes all the pieces!

Because the truth of the markets implies that all the pieces is an area in your chart.

So, it pays to see trend lines like this…

Because sometimes, the market doesn’t align with (or is simply too late to align with) the drawings in your chart!

However the moment the market “reacts” to your trend line-area…

Then that tells you the market has conformed to your trend line!

This approach is one other way that you would be able to improve your entries out there.

By treating trend lines as “areas,” you give enough room for the market to react to your trading ideas.

Got it?

OK – then let’s do a fast recap of what you’ve learned today!

Conclusion

Learning use trend lines might be the very first thing you learn with regards to technical evaluation.

But as your trading years go by, you realize how relevant and useful the trend line is…

…even when it’s such a straightforward tool!

At any rate, here’s what you’ve learned today:

• A trend line works by simply showing the areas of value in several types of trends
• Use swing slows to plot trend lines in an uptrend and use swing highs in an uptrend
• A trend line can determine if a trend is strengthening or weakening depending on the slope of its swing highs/lows
• You’ll be able to enter pullbacks using trend lines by waiting for the third touch or more
• You can even enter breakouts if the worth makes a breakout beyond the pullback
• Only plot trend lines relevant to your trades, and all the time treat trend lines as an area in your chart

…and there you go!

A whole guide on use trend lines!

So now, it’s your time to share.

Have you ever used trend lines before?

If that’s the case, how did it enable you to in your trading?

Or perhaps you’ve got a greater tool in mind besides the trend line?

Share your ideas with me within the comments below!