Upward Commodities Trendlines and Channels

An upward trend-line is drawn below the trend setup by connecting at least 2 lows. This upward trend line will draw a line that show the general direction of the market.

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

Since the market moves in a zigzag manner traders normally draw a trend-line which portrays the general upward direction of the market.

A up trend occurs when the fore price will continue to make consecutive higher highs and higher lows. Each price high is higher than the previous high - higher high, and each low is higher than the previous low - higher low.

Commodity Trading Up commodities trading trendlines gain more validity each time trading price touches this upward trend line 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 upwards trendline is a technical sell signal, and usually the first indication that an upwards trend might soon end.

Drawing an Upward Commodities Trend Line

When the market moves upward it forms higher highs & higher lows forming a bullish market movement - Up-ward Commodities Trend. An upward trend-line can then be drawn by connecting these higher lows.

To draw this upward trend line setup we use supports. To draw the upward trend line correctly two support levels are needed. When commodities trading price touches the upwards trend line we buy and place stop loss orders just a few pips below the upward trend line. The 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 commodities trades as long as trading price is within this upward trend bullish market setup and within the support areas. These support levels are the levels where if the market retraces then these points will provide strong supports for the trading price. This is why many commodity buyers will wait until trading price retraces downward & hits these retracements levels market the upward trend line to open buy commodities trades. Commodities trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.

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

Upward Commodities Channel

An upward commodity channel is plotted by plotting a line that is parallel to the upwards trend line & then adjusted to touch the tops boundary of the price movement. This then forms an upwards commodity channel and as long as the price stays between these two trading channels the bullish market movement will continue moving up.

Trading The Commodity Trading Channel

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

MetaTrader 4 Tools For Drawing Commodities Trend Lines and Channels

The Commodity MT4 Trend-Line Indicator drawing tools to draw these trend lines and commodity channels setups on the MT4 are located on the MT4 drawing tool bar within the MT4 commodities trading platform, To get this MetaTrader 4 tool bar if it is not activated on your platform, Click in 'View' Next to the 'File' menu at top left corner of the MT4 commodities platform & click View, Then Press on Tool-Bars, Then Check the 'Lines Tool-bar' by clicking on it.

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

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