Trend Lines

Trading Discussion News and Economy
1

A very good day all,

I’m currently a student in the school of Pipsology, HAHAAAA I like that.
I was reading on the trend lines topic and doubts started popping up when I read this line;

“It takes at least two tops or bottoms to draw a valid trend line but it takes THREE to confirm a trend line.”

Oh, and what does it means when one says "trend line become stronger?"
Did the person meant less likely it will break?

One last one!
When the “textbook” mentioned that a resistance or support is breaking, does that meant they are going the
opposite direction?

Will any kind soul be enlighten me on this three?
Thanks!

Best Regards,
Nivka.

2

Well, the more a trend line is tested and held the price movement, the stronger it is

3

Thanks Gt12Ry7Wl,

I got it!
but I’m still not very sure about this sentence;

“It takes at least two tops or bottoms to draw a valid trend line but it takes THREE to confirm a trend line.”

Best Regards,
Nivka.

4

I get where you are comming from on this but I disagree. The more a trend line is tested the higher the validity but also the higher the probability that it will be broken.

5

Therefore, I can also say that;
The more validated it is, the chances of breaking the trend is higher?

6

Most people wait for two points to appear in order to draw a trend line,
then project it in to the future. If price then bounces on the projected line it’s confirmed.

Stronger/weaker lines don’t matter, just get in and trail behind the line for as long as possible.
If it breaks the line, already know what you’re going to do.

7

Thanks jpadventure,

Now I understand why stronger and weaker lines don’t matter, because we are talking about the market here! Things are always unpredictable.

Nivka.

8

I agree with bobmanic. Also the higher the time frame the more reliable the trend line.

9

Thanks mrchilled for the information as well, all these are very helpful for the fundamentals!

10

Many of the Traders/Investors those who started reading charts would first like to test their skills with trendlines. They Plot trend lines to identify the underlying trend i.e making them to justifty bull market or bear market. There is basically a wrong assumption prevailing among various traders/investors that a stock/index broken trend line drawn by them means a bearish game to start. The reason is that a break of trendline can be a warning sign that a trend is about to end. This is a dangerous play if you are involved in derivative trades and taking decision based on such assumtions. such kind of trades will change the trading mentality of traders/investors in taking decision

11

Thats so true! I was trying to catch the trend-breaking signal when i just started trading, but always when i thought it is a break of trendline, it is usually a fake one. Now I think trading inside the trendline is much more safe and profitable.

12

It can mean both things. When trend line becomes stronger, means market has hit that a good amount of times.

13

i follow trendlines strategy in London session. it is very effective strategy, it is very confident idea.

you will have to wait for an hour after london session opens, prices usually pull back and forms higher high or lower in 15 min.

draw a trend lines at below if it is up trend and above price if it downtrend. the moment price breaks the trendline is the reversal, you take position there.