10 Aug, 2017

Trend line; a powerful tool in technical analysis for trading

Trend line a powerful tool in technical analysis for trading

Trend lines are the tools which help you to understand the trend of the market. No one can predict the movement of the market. Some times every one get confused at the junction of their trading life .Then you feel that you are in a new place. Even if you are well experienced trader you also wonder about the way the market is gone. The same things happen in the case of fresher also. Most of the trend lines in technical analysis have a potential to reveal the movement based on the price. Trend line depends on the time also. Above all trend line give the conformation and identification of trend. Market will never move in a steady way. It will highly fluctuate. So the best way to identify the trend of the market is follow the trend line. Most of the traders follow the trend line not only on the basis of the profit. But it is sure a trend line can lead you in proper way. You can take decision after following trend line.

But in some cases people would be in loss by follow the trend line. Don’t think it is because of the fault of trend line. It is happen only due to the improper approach of users. If you follow the trend line without enough care you may be in loss. Support and resistance level also has a great influence over the trend line. The trend line never provides you signals for your trade. Instead of that they make you conscious about the movement of the market. That means if the market will be in reverse from your expectations trend line gives a warning to give more attention in your trade. If the market is in favor of you it will help you to decide your profit. A proper approach towards trend line keeps you to maintain minimum profit.

Trend line moves in the direction of the movement of price. There are three types of trend movement.  They are up trend, down trend and horizontal trend. Uptrend indicates the rising of price while the down trend indicates the falling of price. You can fix your entry and exit point by simply following the trend line if you are in enough profit. Trend line help us to think in the proper way and also forced to make a logic approach towards the trade. It has lots of things to teach you.

It will make you able to understand the movement of the market. Those who can watch the correct movement of the market can win in trading. Everyone will acquire an ability to make their perfect move by following trend line. So it is not a simple line it is a powerful tool in technical analysis. Whenever the trend changes you have to make a decision according to the trend of the market. You should be able to wait where trend is not supporting your trade. It is better to avoid faults entries to avoid losses.

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