Trade options along a trend line
Now before I dive into specific Trend Line strategies and techniques, you must first learn how to draw a Trend Line correctly. And which to ignore?
An example: Because a Trend Line can also alert you when market conditions are changing. By paying attention to the steepness of the Trend Line.
For example: If your Trend Line is getting flatter, it means the market is moving into a range condition. And if your Trend Line is getting steeper, it means the trend is becoming stronger or possibly going into a buying climax.
Is this important?
Heck yes! Because if you know market conditions are changing, you can adjust your trading strategy accordingly.
Next… Trend Line Trading: How to better time your entries If you want to find good trading opportunities, then you must trade near the Trend Line. But if the pullback is shallow and you enter your trades too late, you risk missing the move.
Introducing The Trend Line Breakout technique. Does it make sense? And in such cases, you want to trail your stop loss on the current market swing and exit the trade if the price closes below it.
So the question is… How do you identify a trend reversal to the upside? If it does, the market is likely to reverse in the opposite direction.
By Casey Murphy Updated Jun 25, Uptrends and downtrends are hot topics among technical analysts and traders because they ensure that the underlying market conditions are working in favor of a trader's position, rather than against it. Trendlines are easily recognizable lines that traders draw on charts to connect a series of prices together. The resulting line is then used to give the trader a good idea of the direction in which an investment's value might move.
Now over to you… How do you use Trend Line in your trading? Leave a comment below and share your thoughts with me.