After you learned three types of trends, it is time to learn more about trend lines that are used to identify the trend.
They are the first tool you will come across and one that you will use the most if you decide to follow the rules from our course.
Our first task is to explain to you how to draw it.
Once you find two established swing lows, you match them with a trendline.
Once you match them, you extend that line.
A trendline with two touches is a tentative trend line while the one with three touches is a valid trend line.
You extend the trend line cause you want to see how price reacts to that price area in the future.
Later on, in the course, we will share with you exactly setups that should form on next touch.
For now, what is important for you to know is to identify lows and to match them with a trend line.
Once you match them, extend the line to monitor that area in the future.
Let’s see if this trend line was the area of interest for future price action.
As you can see, the area played an important role in the future price action.
While someone will say that price didn’t touch the line, that’s the point.
If you are looking for perfection, you will never enter a trade.
A Trendline is not a single price but rather the area around that price.
If we have a trendline at 1000, the area of interest is not only 1000 but also 995 or 1010 as well but not 1400.
By connecting lows, you are marking a support area.
Milos is an independent trader, with a background in journalism and publishing. Nomadic by nature, he’s lived in four different countries this decade. He’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives. Milos got into Bitcoin while completing his degree and hasn’t looked back since, writing about anything crypto-related. He is the co-founder of the Cryptoaims and he has a strong passion to educate people about this revolutionary technology.