Trend line strategy Flashcards
1
Q
what is a trend line
A
trend line connects the swing high and swing low during a trending market
2
Q
why trend line
A
- can act as form of support and resistance
2, a break of trend line can signal a “possible” trend change
3
Q
how to draw trend line
A
- minimum of 2 touches, the more the better
- trends aren’t always smooth
- treat tend line as area guidance
- don’t force trend lines.
4
Q
how to use trend line
A
- trend trading
2. reversal trading
5
Q
trend trading with trend line
A
traders taking action at the area of high confluence
6
Q
what’s area of high confluence
A
an area where support or resistance crosses with a trend line
7
Q
reversal trading
A
look for key price action patterns that have formed right before a trend line break
8
Q
double top or double bottom patter
A
failed to make higher high shows a loss of momentum from the buyers which is important if you want to go against the dominant trend
9
Q
trend change pattern
A
- in a up trend you look for lower high or a lower low to occur right before a trend line break
- in a down trend look for a higher low or higher high to occur right before a trend line break
