How to Draw Trend Lines

Perfectly Every Time CHEAT SHEET

WHAT IS A TREND LINE?

A trend line is the diagonal equivalent of a horizontal level of support or resistance.
As traders, we use them to identify trends and spot potential reversals.

4 KEYS TO DRAWING TREND LINES ACCURATELY

✓✓ Use the higher time frames (daily and 4-hour charts)
✓✓ Aim to get as many “touches” as possible without cutting off too many wicks
✓✓ Trend lines with at least three touches tend to be the most reliable
✓✓ Never force a trend line to fit – the best ones will be obvious

SPOTTING OPPORTUNITIES

Look for setups that form
at trend line support or resistance.
This bullish rejection candle on the GBPCHF
formed along trend line support, creating a
favorable opportunity to get long.
Watch for a breakout in the opposite direction.
This trend line on the GBPCHF was one of the best
I had seen in quite some time. Following the close
below support, the pair retested the level’s new
resistance before selling off.

The USDJPY had consolidated into a wedge.
Following the break above trend line resistance,
the pair retested the level as new support and
formed a bullish pin bar in the process.
This trend line on the GBPJPY was in place for
nearly two years before breaking down. The result
was a 5,800-pip drop, making it one of the most
advantageous and profitable trend line breaks I
had ever witnessed.