I have done the forex preschool and kindergarten and now i am on the elementary school bit and am confused about trend lines.
What does the book mean when its stating : " The STEEPER the trend line you draw, the less reliable it is going to be and the more likely it will break?"
I think i understand it but i need a different explanation. Can anyone help?
Oh yeah i am a super noob… I have 6 hours of learning so forex in total in my new currency trading career. I am starting to like it though.
The angle of the trend line helps us to determine the frequency of trading activities in the market.
in comparison, a 60 degrees angle shows a faster action of a group of traders than a 30 degrees trendline.
The trouble with all that is the charting software you use, if it adjusts the screen display depending on how volatile the price action is, as with metatrader 4, the trend angle changes.
The way I understand this is, If you were to compare trendlines of different angulation, the steeper one is likelier to be disobeyed by the market quickly compared to the ‘flatter’ ones. Why? Because I suspect it is highly unlikely for the highly liquid FOREX to ‘obey’ a steep trendline for extended periods.
Keep in mind this applies much more to longer TFs though
Just saying, there is no way to describe a trendline in FX with angles. In any case, the basic principle behind it is that a very hard and fast move will be followed by a similar, if not weaker, rejection. This is typically seen during news releases, but generally, any rally greater than some randomly high threshold will be followed by another randomly high retracement.