TrendLine – The Trend Line of the market, is the first and foremost prerequisite of a trader. Most counter-trading is suicide, except for a very few that succeed, but the percentage is actually very small. You can understand trading against the market, against the trend, it’s like weighing the world by yourself. Therefore, the trend is very important, almost the most basic knowledge for traders. In this article, let’s learn with Bitcoin Vietnam News what is TrendLine, how to identify market trends, how to draw TrendLine lines and types of tools.

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1. What is TrendLine?

2.

How to determine current TrendLine

2.1.UpTrend What is UpTrend?

2.2.What is DownTrend?

2.3.What is Sideway?

3.How to identify TrendLine

4.

How to draw TrendLine on TradingView and MT4

5.

Conclusion

What is TrendLine?

TrendLine also known as trendline is a straight line that helps investors identify price trends in a corresponding period of time. Trend lines are created by connecting two or more points together. In there:

The uptrend line is a straight line connecting the troughs when the price hits it, it’s called the support line Resistance line In a sideways trend, the peaks and troughs are equal, so the TrendLine connecting the troughs is the support line, the line connecting the peaks is the resistance line.

How to determine current TrendLine

To prepare a trading setup, the first thing you need to do is see the trend in progress. We will discuss some techniques to spot potential trends on charts.

Common types of markets are:

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Uptrend – UpTrendDowntrend – DownTrendTrend sideways – Sideway

Catching trends is important. It has been said by many people: The trend is the investor’s friend. Why so? Because in an uptrend, it is very easy for you to make a profit whether it is a short, medium or long term investment. On the contrary, in a downtrend, if you are a newbie, “catching a falling knife” is never easy. Just be not careful, you can get the knife to bleed.

What is UpTrend?

Uptrend or Uptrend refers to the trend of the price moving in an uptrend. Usually, if the price is likely to go up, make a profit.

Characteristics of an uptrend

New high higher than old high or new high higher than old high New low higher than old low or new low higher than old low

Eg

H2 is higher than H1 and H3 is higher than H1-H2.L1 is lower than L2.

What is DownTrend?

A downtrend is a downtrend in price movement. Usually, if the price is expected to fall, sell for a profit.

Characteristics of a downtrend

New high below old high or new high lower than old high New low below old low or new low low

Eg

H2 is lower than H1 and H3 is lower than H1-H2.L1 is higher than L2.

What is Sideway?

The trend is moving sideways or sideways, the trend is moving sideways. Not in one direction. Cause of uncertainty Many traders won’t trade in the Sideway because they don’t know the price trend. However, some traders can profit from trend uncertainty from resistance.

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Characteristics of a downtrend

New high near old high or new high close to old high. New low near old low or new low near old low.

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Eg

H1, H2, H3 are similar. L1, L2 are similar.

How to identify TrendLine

To draw the TrendLine correctly, all you need to do is identify exactly 2 major peaks or major troughs and connect them together.

However, the problem here is how to know which is the main trend, and which is the secondary trend? The answer is that you need to determine the swing point of the market and connect them together. And to determine if this is the main trend of the market, you should only rely on TrendLines made up of 3 swing points or more.

To summarize a few things to keep in mind when you draw trendlines:

The steeper the trend line, the lower the reliability and the higher the probability of it being broken. It takes at least 2 highs or lows to draw a correct trend line but it takes 3 points but I mentioned above to draw a correct trend line. confirm the most valid trendline.The trendline will become stronger if it touches many times and doesn’t break.You can’t force or try to get a trendline that fits you right. , because to be an accurate and reliable trend requires it to be clear to investors as well. Those who draw trend lines also rely on the closing price of the candle, or a combination of the opening and closing prices, high candle, low candle.

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How to draw TrendLine on TradingView and MT4

On MT4 or MT5 software, you just need to click on the “/ (diagonal) icon on the screen.

If the price is above the uptrend, hold down the left mouse button and draw a line connecting the low price points with the low price of the candle. This line becomes a bullish TrendLine.

If the price is above the downtrend, hold down the left mouse button and draw line connecting the high price point with the high price of the candle. This line becomes a bearish TrendLine.

Alternatively you can move the TrendLine by double clicking and changing the line color and thickness on the properties screen.

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And on TradingView software, after choosing your favorite currency pair, please pay attention to the toolbar as shown

In which, number 2 is the TrendLine line, which contains all the tools for traders to draw, in order to find price trends, identify support and resistance areas, price channels…

Conclude

It can be said that TrendLine is one of the basic but important things in Forex investment in particular and financial products in general. Hope this article has provided you with the most useful knowledge about TrendLine.