Basic Concepts Of Trend
The trend is the direction that shows you the direction of stocks. Generally, Trend had three directions as upside, downside, and sideways.
Read Also: Pro+ Basic To Advance Head And Shoulders Reversal Patterns
UPTREND
When any stocks have an upside direction, It is called an uptrend. This type of trend makes higher high and higher lows.
DOWN TREND
When any stocks have a downside direction, It is called a downtrend. This type of trend makes lower lows and higher lows.
SIDEWAYS TREND
When any stocks have a sideways direction, It is called a sideways trend. This type of trend makes the same high and lows.
Trend Lines
This is one of the most important things that we use in prize action trading/investing. Now a question is raised that How to draw a trend line? As you know that about the trend that uptrend continues with making higher highs and higher lows as this downtrend continue with making lower lows and lower highs.
1. The trend line in an uptrend is like angle based support line which giving support to higher lows of the uptrend.
2. The trend line in a downtrend as angle based resistance line which giving resistance to lower highs of a downtrend.
How to draw a trend line? | Correct Trend Line | Trend Line Important Point | Don't do this mistake to draw in Trend Line...
The correct drawing of the trend line is a lot like every other aspect of charting and some experimenting with different lines is usually necessary to find the correct line.
Sometimes we draw the trend line that should be redrawn. You should follow some guidelines when you drawing the trend line is given below...
First of all, there must be evidence of the trend line that a minimum of two lower highs is taking support on-trend line in an uptrend, and a minimum of two higher lows are taking resistance on-trend line in a downtrend and in both second higher is grater than first.
And second, rememberable things are always checking the retracement that must be less than 50% for the valid trend line.
In the next post, I will present to you How to use of trend line? which is an advanced trend line concept.
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