Draw a Stock Trend-Line on a Chart

How to Draw a Stock Trend-Line on a Chart - How to Draw Stock Trend Lines on Stocks Charts

Principles of How to Draw a Stocks Trend Line on a Chart

1. Use stock candle-stick charts to draw stock trend lines

2. The points used to draw a stock trendline on a stock chart are along the lows of the stocks price bars in a bullish stock market. An upwards bullish stock trend is defined by higher highs & higher lows.
3. The points used to draw a stock trendline on a stock chart are along the highs of the stocks price bars in a bearish stock market. A downward bearish stock trend is defined by lower highs and lower lows.
4. The points used to draw stock trend lines on the stocks charts are the extremes points - the high or the low stock price. These extremes are important because a close beyond the extreme chart points tells stock traders the stock trend might be changing. This is an entry or an exit stock trade signal.
5. The more often a stock trendline on a stock chart is hit but it is not broken, the more powerful its stock trend signal.

Example 1: How to Draw a Stocks Upwards Stocks Trend Line on a Chart

To draw an upward stock trendline on a stock chart use two support points in a bullish upwards stock trend so as to plot the upwards stock trend line and then extend the stock trend line as displayed below. Upward stock trendline on a stock chart will show the general direction of stock prices and as long as stocks price is above this upwards stock trend line then the upwards stock trend will remain intact - bullish upward stocks trend.

If stock prices move below the upward stock trend line which is the support level for the bullish upwards stock trend then stocks traders should close all their open stocks trades - because this might be a stock trend reversal signal. In an upwards stock trend stocks price should generally stay above support area which is marked by the upwards stock trend line on the stock charts.

Draw a Stock Trading Up Stock Trend-Line on a Chart in Stock Trading

How to Draw an Upward Stock Trend Line on a Chart - How to Draw a Stock Trend-Line on a Chart

Example 2: How to Draw a Stocks Downwards Stocks Trend Line on a Chart

To draw a downwards stock trendline on a stock chart use two resistance points in a bearish downwards stock trend so as to plot the downwards stock trend line and then extend the stock trend line as displayed below. Downwards stock trendline on a stock chart will show the general direction of stock prices and as long as stocks price is below this downward stock trend line then the downwards stock trend will remain intact - bearish downward stocks trend.

If stock prices move above the downwards stock trend line which is the resistance level for the bearish downwards stock trend then traders should close all their open stocks trades - because this might be a stock trend reversal signal. In an downward stock trend stocks price should generally stay below the resistance area which is marked by the downward stock trendline on a stock chart.

Draw a Stock Trading Down Trend-Line on a Chart in Stock Trading

How to Draw Downward Stock Trend Line on a Chart - How to Draw a Stock Trend-Line on a Chart