How to Draw Trend Lines Analysis

How to Draw Trend Lines on MT4

The MetaTrader 4 platform provides charting tools for drawing the trendlines in MetaTrader 4 charts. To draw trend lines on a chart on MetaTrader 4 software, xauusd traders can use trendline drawing indicator tool provided on the MT4 software that is shown on example shown & described below.

How to Draw Trendlines & Analysis of Trendlines in Gold Trading

How to Draw Trendlines on MetaTrader 4 - How to Draw Trendlines Analysis

To draw trend lines on a chart - just click the MT4 trend line plotting tool above on the MT4 technical analysis software and select point A where you want to start drawing the trend line & then point B where you want the trendline to touch. You can also right click on trendline & on the trendline properties option select the option to extend its ray by ticking the "ray check box", if you do not want to extend the trend line, then uncheck this option in your MT4 platform - trendline properties. You can also change other trendline properties such as color & width on this trendline property popup window of the trendline properties. You can download MT4 xauusd trading & learn how to draw trendlines & learn trendline technical analysis with it.

XAUUSD Analysis of Trendlines with Examples

There are 2 technical analysis techniques used to trade the trend lines:

1. Trendline Break
2. Trendline Bounce

The technical analysis of these two trendline technical analysis strategies is described using the example illustrated and explained below:

How to Draw Trendlines & Analysis of Trendlines in Gold Trading

The trendline bounce is a continuation signal where the price bounces off the trendline & continues in same direction as that of the trend.

XAUUSD Trendline Bounce Analysis in Up Trend

• In an up-ward trend, the price will bounce upward after hitting this upward trend line level which is the support area.

Up Trend - Trendline Bounce after Touching Support Levels Provided by the Upwards Trend Line

Upwards Trend - Trendline Bounce Analysis How to Draw Trendlines & Analysis of Trend Lines in Gold Trading

Trendline Bounce Analysis in Down Trend

• In a down-wards trend, the market will bounce downwards after hitting this trendline level which is the resistance zone.

Down Trend - Trendline Bounce after Touching The Resistance Levels Provided by the Downward Trend Line

XAUUSD Down-ward Trend

How to Draw Trendlines & Analysis of Trendlines in Gold Trading

The trendline break is a reversal signal where the market goes through the trendline & starts moving in opposite direction.

XAUUSD Trendline Break Analysis

When a up trendline is broken then sentiment of the market reverses & becomes bearish

Upward Trend Trendline Break

XAUUSD Trendline Break Analysis

When a down trendline is broken then sentiment of the reverses & becomes bullish

Downwards Trend Trendline Break

NB: for very strong trends, after this trendline break reversal signal, xauusd price will consolidate for some time before moving in the opposite trend direction. For short term market trends then this trendline break reversal signal will mean price may reverse immediately.