Trading with Trendline - In the first introductory volume of our mini educational series, we discussed the importance of educating yourself before you start trading in the financial market with a basic understanding of Technical Analysis. Let's do so!
Why do we care? Because between these lines we can catch the volatility at the highest or lowest and maximizing our gains. To draw the resistance and support lines find pivot points where multiple candles hade similar closing prices. The appointed numbers 1 and 2 for both resistance and support should give you a clear understanding of how to determine the limits. Also, another factor that affects resistance and support are the time frames, since the same levels will not match. When building a strategy by using trendlines or resistance and support make sure to chose the time frame. NOTE: The resistace and support levels are suitable for long term trading and not scalping, use from one hour, four hours, daily, weekly or monthly charts since they contain less noise. *Noise in the forex slang refers to opening and closing prices that are chaotic for shorter time frames and very hard to predict.
If we consider the green price curve alone, we can simply observe a growth that seems to be accelerating over the last few months. Let us now show this first rule to which the bounding curves of the actions are subjected to. The trendlines. Look at line A that I have drawn in red: it joins the highest of the curve of the courses in several points.
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