Add Trend line in Chart

Sometimes support and resistances are formed diagonally on the same way like a stair-case. This forms a trend which is a sustained movement in one direction either upwards or downward.

A trendline depicts the points of support and resistance for price, based on the direction of the price. For an upward moving market it will shows the points of support & for a downward moving market it will show the areas of resistance & they are mainly used by many investors to determine these resistance & support levels.

Gold Trendline is a straight line that connects 2 or more price points then extend into the future to act as areas of support or resistance. There are 2 various different types: upwards & downward. It is an aspect of analysis that uses line studies to try & predict where the next move will head to. A trader must know how to draw & interpret the signals derived and generated by this tool.

The basis of this market analysis is based upon the idea that the markets move in trends. They are used to show 3 things.

The overall direction - up or down.
The power of the ruling move - and
Where future support and resistance will be likely located

If trend-lines form in a certain direction then market usually moves & heads in that particular direction for quite some time until a time when it's broken.

Plotting these on a chart portrays the general trend of the price which can either be upwards or downward.

Shown Below is an example of how to draw these on charts

Guide: How to Draw and How to Trade Upward Move

XAU/USD Trading TrendLine - How Do I Draw TrendLine in Chart? - How Do I Interpret Trend Using Trend Line?

Guide: How to Draw and Trade Downwards Move

Trend Line - How Do You Analyze a Downward Trading Trend Analysis in Trading?

The MT4 platform software provides charting and trading tools for drawing these on charts. To draw them onto a chart, investors can use the tool provided on the MT4 that is shown below.

Trendline - How Do You Draw Trend-line on Chart? - How to Interpret/Analyze Trend Using Trend Line

To draw on this on a chart just click the drawing tool above on the MetaTrader 4 technical analysis software platform & select point A where you want to start drawing and then point B where you as a trader want the it to touch. You also can right-click the trendline & on the properties option select the choice/option to extend its ray by ticking "ray tick box", if you do not want to extend it, then uncheck this option on your software. You also can change other properties such as color and width on this property pop up panel of the properties. You can download MT4 software & learn analysis with it.

The trend is your best friend. Is a popular saying among investors because you should never go against it. This is the most reliable technique to trade because once the prices start to move in one given direction they can continue moving in that particular direction for quite some time - hence using this method/technique presents opportunity to earn profits from the market.

Principles of How to Draw

Use candlestick charts
The points which are used to draw are along the lows of the price candlesticks in a upward market. An upwards bullish move is defined by higher highs & higher lows.
The levels used to draw are along the highs of the price candlesticks in a falling market. A downward bullish move is defined by lower highs and lower lows.
The points used to draw are extremes points - the high or the low price. These extremes points are important because a close beyond the extreme tells investors the trend may be changing. This is an entry or an exit trade signal.
The more often a trend line is hit but not broken, the more powerful its signal.

There are 2 main ways of trading this setup:

Bounce
The Break

Analysis Methods

The bounce is a continuation signal where the price bounces off this line to continue heading in the same direction. In a downward move, the market will bounce downwards after touching this level which is the resistance zone. In an upwards move, the market will bounce upward after hitting this level which is the support area.

The break is a reversal signal where the market goes through the line & starts heading and moving in the opposite market direction. When an up-trend is broken then the sentiment of the market reverses and becomes bearish and when a down trend is broken then the sentiment reverses & becomes bullish.

For very strong trends, after this break signal, price will consolidate for a period of time before heading in the opposite direction. For short term trends then this break signal will mean price might reverse immediately.

In trading analysis, both the bounce & the breaks-out that are used in analysis charts are based upon these technical levels being support & resistance.

Entry, Exit and Setting stops:

This method used to determine good entry and exit points, protective stops are placed just below them. The bounce is a low-risk entry strategy used by traders to place entry trade positions after price has retraced. Trade Positions are setup along these levels and a stoploss order placed just above or below.

The trend-line break is a crucial technical technical indicator of possible reversal. When a trend its broken price starts to move in the opposite market trend price trend direction. This provides an early exit signal for investors/traders to exit their open trade positions and take profits. When there is a penetration of these technical levels, it is a trade signal that price can start heading in the opposite market direction.

Unlike other technical analysis indicators there is no formula used to calculate it, this pattern is just drawn between 2 chart points.

Study More Guides and Topics:

Trade Gold Trading

Add Trend line in Chart

Principles of How to Draw

Analysis Methods

Entry, Exit and Setting stops: