I’m looking at some graphs of various currency pairs and I’m trying to figure out if there is a trend line there. I’m looking on the hourly chart and looking as far back as the 1st of january 2016 and I just can’t tell if something is a trend or not. I mean sure I can draw a trend line and most of the time it fits but this doesn’t actually mean it’s trending down or up right?
When looking for trend lines, what time period do you use? How many days or hours or weeks does it need to be before it becomes a trend line or not? How do you know when the trend line is over, or when it’s just starting?
Remember that you can only define a clear trend AFTER it’s been formed. There is no setup that can 100% predict a trend before or at the start of it being formed. In hindsight you can always find trends on almost any chart, but know that you can not trade in hindsight.
You are trading probbabilities, and you will have to WRITE down your strategy according to your personality
Trading trend is really profitable, spotting trends at their early formation can fetch you great pips. A trendline is simply a line which connects two or more highs or two or more lows as the case may be. You could simply connect two swing lows or two peaks to get a trend. The popular rule is the trend is your friend. Trendline are powerful in getting your entry points. What I do most times is set my entry orders some pips above a support trendline or on the other hand, set my entry order some pips below a resistance trendline. This way so that should prices react before they get to the trendline, I could possibly still get a chance at getting into one trade.
Quite simply, whatever looks like the most obvious place to draw the line, is where it should be. Trend lines are subjective so just draw where you think it looks best and dont treat it as gospel.
