How To Draw Forex Trend Lines

Forex trend line is the most common tool in Forex technical analysis. This trend line can gives reversal signals, retracement signals, buy or sell trading signals, as support or resistance and etc. But in fact many Foreign exchange traders do not use trend line, even they use this tool, they do not use it properly in trading.

If trend line drawn properly, it would gives accurate trading signals as other technical indicators. Traders usually do not draw a trend line correctly, they just draw a trend line based on their want. So, how to draw a trend line correctly?

Bullish trend line
Bullish trend line is drawn trough support levels (valleys), which means trend line is drawn below the market price.
Bearish trend line is drawn trough resistance levels (peaks), which means trend line is drawn above the market price.

Because of this tool is line shape, we need 2 spot level of support or 2 spot of resistance level between. But to make an accurate trend line we need 3 spot level of support or 3 spot level of resistance.

There are 3 kinds of trend line:
- Bullish trend line
- Bearish trend line
- Sideways trend line

There are important things about trend line
- At least we need 2 spot level of support or resistance to make a trend line.
- To make an accurate trend line we need at least 3 spot level of support of resistance to make a trend line