A trend line is a line used by technical analysts to draw past price trends of a certain foreign exchange product or commodity futures, stocks, etc., with the purpose of predicting future price changes. This straight line is formed by connecting the highest or lowest price points of a product's rise or fall in a certain period of time. The angle of the final straight line will indicate whether the variety is in an upward or downward trend.
If the price rises above the downward sloping trend line, or falls below the upward sloping trend line, technical analysts generally believe that a new price trend may emerge. It is generally believed that trend line analysis is a method of technical analysis. However, trend line analysis must be combined with other technical analysis for better results.
In foreign exchange trading, it does not need other indicators, just a few simple connections, you can preview the market. Many people are still skeptical of trend lines, but the fact is that in most cases, the success rate of trend lines is much higher than other indicators.
So how do we make good use of trend lines?
Today, I will give you a detailed introduction on how to use trend lines to capture the buying and selling points of the market.
Compared with other indicators, the trend line is simple and effective. Traders only need to connect the high or low points in a certain market to find the corresponding trend. Once a trend is formed, the probability of market continuation will be very high. This is the basic principle of the trend.
The straight line connecting the high points of the fluctuation is the downward trend line, and the straight line connecting the low points of the fluctuation is the upward trend line. According to the time of the band, it can be divided into a long-term trend line (connecting long-term fluctuation points) and a mid-term trend line (connecting mid-term fluctuation points). The uptrend line connects the low points of each band, and the downtrend line connects the high points of each band. . Each upward trend line requires two obvious bottoms to determine, and each downward trend line requires two vertices.
When the upward trend line breaks, it is a sell signal. Before breaking below, the uptrend line is the support for every pullback. When the downtrend line is broken, it is a buy signal. Before it is broken, the downtrend line is the resistance for every rebound. As a fixed trend moves for longer, the trend is more reliable. When the exchange rate runs in an ascending channel composed of an ascending trend line and a descending trend line, every time it breaks the descending trend line, the best buying point is formed near the descending trend line.
In fact, in essence, using trend lines to capture buying points is based on the actual capital cost of the main force. Institutions that fall into the main cost zone naturally have to defend the market, so the trend line reflects the main cost line.
The above is the clever use of trend lines to capture trading buying points, and I hope it will help you.