Friday, October 26, 2012

Trend Line (Swing Highs and Lows)

What are Trend Lines? A trend line represents a supply and demand among traders. According to Wikipedia, A trend line is a bounding line for the price movement of a security.
A support trend line is drawn by connecting several swing lows and a resistance trend line is
drawn by connecting several swing highs.
Example of Support Trend Line:





A resistance trend line is drawn by connecting several swing highs
Example of Resistance Trend Line:















So first of all, let me go through with you how to locate a swing high and swing low before we
start to draw a trend line.




Swing high is basically an N-shaped formation with several candles on the left and right side
of a single high candle.








Swing low is basically a V-shaped formation with several candles on the left and right side of
a single low candle.














However we are not interested in all swing highs and lows when drawing a trend line, we are only looking out for those that have more weightage as this will produce trend line that is more significant. Below is the level of weightage for each formation



Weak Swing


Medium Swing


Big Swing






Once you have identified all the medium to big swing highs or lows, you can start to plot your
trend line. There are 2 types of trend lines you can draw and we will be going through all of
them in this book. They are




You need to have a good knowledge of these 2 different trend line drawing methods as you will need to combine them to have a better trading experience.

2 comments:

Herry Hermawan said...

trimakasih masta ilmunya sangat bermanfa'at sekali so simply .....

matamerah said...

Semoga berguna.

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