A1 Trading Company

Technical analysis guide

Trendlines

Big Idea: Trendlines are another commonly used tool to help traders spot wedges or channels in price action. Trendlines are straight lines that connect one point to another to help investors see where channels form and whether price is nearing a breakout or if it is stuck in consolidation. The way some traders draw these lines can vary from the way others do, so it is mostly subjective which can cause discrepancies in price action. Some traders may even argue that trendlines do not work solely for that reason; but like support and resistance levels, trendlines are used for investors to consider certain areas or zones on where to place their trades.

What to Look for When Trading With Trendlines

What traders are mainly looking for is a general area to long or short certain pairs/stocks/crypto based on the overall trend. That way, you can get a near-perfect entry and considerable probability of success in whatever direction you are trading in. For example, if you were bullish on the SPX500, but see that it is in an uptrend, you might want to buy when price comes down to or around its trendline.
Trendline Trading

Key Takeaways

A trendline is a line that connects two or more points on chart to show the overall direction of price action as well as the relative boundaries in which price trades.
There can be an uptrend, downtrend or sideways trend.
Trendlines are subjective, so there is no such thing as a perfect way to draw them.
Trendlines are ways for traders to spot direction and trade in that direction.

Free Telegram

Join free telegram for analysis, trade ideas, & trading resources!

Join telegram

Related Videos

How to Trade Forex using Trendlines | Trendline Trading Strategy ?
FREE Price Action Course: Mastering Trendlines for Pullbacks & Breakouts
FREE Price Action Course: Mastering Trendlines for Pullbacks & Breakouts

Keep Learning Technical Analysis!

Up Next...
  • Technical Analysis
    Support & Resistance
    Learn how to use the number 1 most commonly used price action tool!

    go to course

    Technical Analysis
    Trendlines
    Learn how to draw and utilize trendlines in your technical analysis!

    go to course

    Technical Analysis
    Moving Averages
    Learn all about moving averages, and how to trade with them!

    go to course

  • Technical Analysis
    Candlestick Pattern
    Learn all about candlestick patterns, how to spot them, and how to trade them!

    go to course

    Technical Analysis
    Engulfing & Pinbar Candlesticks
    Learn all about engulfing & pinbar candlestick patterns, how to spot them, and how to trade them!

    go to course

    Technical Analysis
    Doji candlestick
    Learn all about doji candlestick patterns, how to spot them, and how to trade them!

    go to course

  • Technical Analysis
    building a technical bias
    How to use technicals to assist your trading entries

    go to course

    Technical Analysis
    breakout trading
    Learn how to capture momentum in the markets with this simple breakdown

    go to course

    Technical Analysis
    Reversal Trading
    Learn how to spot markets reversing early, and get involved!

    go to course

Home
Edgefinder
Signals
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
homesmartphonelaptop-phonemenumenu-circle linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram