Drawing Stock Indices Trend Technical Indicator MT4
How to Draw Indices Upwards Trendlines on Indices Charts
An upwards indices trend line is drawn below the indices trend pattern by connecting at least two stock indices price lows. This upwards indices trend line will draw a trendline that show the general direction of the market.
The example explained and illustrated below shows how stock indices price moves when it is moving in a bullish upward indices trend market. The stock indices price will move upward forming support levels.
Since the stock indices price moves in a zigzag manner indices traders normally draw a indices trendline which shows the general upward indices trend direction of the market.
A upward indices trend occurs when the fore stock indices price will continue to form consecutive higher highs and higher lows. Each price high is higher than the previous high - higher high , and each low is higher than the previous low - higher low.
Indices Uptrendlines gain more validity each time stock indices price touches this upward trend line but does not penetrate it. A upwards trend remains in place until this sequence of higher highs & higher lows is broken.
A down-side penetration of an upward indices trendline is a technical sell signal, and usually the first indication that an upwards indices trend may soon end.
Drawing an Upward Stock Indices Trend Line
When the indices market moves upwards it forms higher highs & higher lows forming a bullish indices trend movement - Indices Upwards Trend. An upwards indices trend line can then be plotted by connecting these higher lows.
To draw this upwards trend line we use support areas. To plot the upward trend line correctly two support levels are needed. When stock indices price touches upward trendline we open buy indices trade and place stop loss stock indices orders just a few pips below the upwards trend line. Indices example explained and illustrated below shows an example of an upward indices trend line.
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The upwards indices trend line strategy will show the general indices trend direction of the market as upwards - therefore indices traders will only open buy stock indices trades as long as stock indices price is moving within this upwards trend setup within the support areas. These stock indices price support levels are areas where if the stock indices price retraces then these levels will provide strong supports for the indices price. This is why many indices buyers will wait until stock indices price retraces downward & hits these trend line retracements levels so as to open buy stock indices trades. Indices trades opened at this support levels have a high Risk to Reward Ratio with minimum indices draw down - stock indices price retracement.
In the above indices upward trend line indices trading strategy a trader would have opened buy stock indices trades from the indices signals generated at the support 1, support 2, support 3 & these stock indices trades would have made profits with minimum amount of indices draw down - stock indices price retracement.
Drawing Stock Indices Trend Technical Indicator MT4
How to Draw Indices Downward Trend Lines on Indices Charts
A downward indices trendline is plotted above the downward trend pattern formed by consecutive lower stock indices price highs, the downwards trendline must connect at least two stock indices price highs, with the most recent stock indices price high being lower. For our indices trading downward trend line examples we shall use the MetaTrader 4 indices technical analysis charts to illustrate example of downward stock indices trend.
Since stock indices price moves downward in a zigzag manner indices traders normally draw a indices downward trendline which shows the general downward indices trend direction of the indices prices. In indices technical analysis this general stock indices price direction is referred to as the Indices TREND by stock indices traders. In indices technical analysis definition we can define indices downward trend line is drawn on indices trading chart showing the resistance levels bearish indices market trend direction.
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A indices downward trend occurs when the stock indices price forms a series of lower highs and lower lows. Each stock indices price high is lower than previous high - lower high, and each stock indices price low is lower than the previous low - lower low therefore showing bearish stock indices price movement - downward stock indices trend.
Indices Downward trend lines gain more validity each time stock indices price touches the downward indices trend line but does not penetrate the trend line. A downward trend remains the general indices trend direction until this sequence of stock indices price lower highs & stock indices price lower lows is broken.
In indices technical analysis, An up side penetration of a indices downwards trend line is a technical buy signal, & is usually the first signal that the bearish stock indices price trend may soon reverse.
Downwards Stock Indices Trendline MT4 Trendlines Indicator
When it comes to learning how to draw indices trend lines correctly - you need to know that when the indices trend is bearish stock indices price forms lower stock indices price lows & lower stock indices price highs forming a general downwards indices market trend direction. These are the points that are used to plot the downwards indices trend line.
To draw this downwards trend line we use resistance zones & to draw a downwards indices trend line correctly two resistance areas are needed. When stock indices price touches this indices trend line, then we open sell stock indices trades & place stop loss stock index orders just a few pips above the sloping resistances:
Trading This Downward Indices Trend Line
When indices trading with this indices trend line indices trading strategy, this indices trend line strategy will show the general indices trend direction of the market as downwards therefore indices traders will only open sell stock indices trades. These indices trend line levels are levels where if stock indices price retraces then these levels will provide strong resistance. This is why many indices sellers will wait until stock indices price retraces upward & hits these trend line retracements levels to open sell stock indices trades. Indices trades opened sell stock indices trades at these levels have a high Risk-:-Reward Ratio with minimum draw down.
For Example, in the above indices example, a trader would have opened sell stock indices trades at the resistance 1, resistance 2, resistance 3 and these sell stock indices trades would have made profits with minimum amount of indices draw down - stock indices price retracement.
Drawing Indices Trend Technical Indicator MT4
The Indices Drawing Indices Trend Line Indicator MetaTrader 4 indices tools to draw these trend lines in MT4 platform are located on the MetaTrader 4 drawing tool bar within the MetaTrader 4 platform, To get this MetaTrader 4 toolbar if it is not displayed on your indices MetaTrader 4 platform, Click in "View" Next to the "File" menu at the top left corner of the MetaTrader 4 software and click View, Then Click on Toolbars, Then Check the "Lines Toolbar" by clicking on it.
Shown Below is screenshot Image of the MetaTrader 4 drawing tool-bar. To draw a indices trendline on a stock indices chart click this MT4 indices trend line plotting tool & choose the points where you want to draw the trend line in MT4 stock indices trading chart.
Drawing Indices Trend Indicator MetaTrader 4 - Drawing Indices Trend Line Indicator MT4
This indices trend line strategy is one of the popular indices technical indicators used by stock indices traders to analyze the stock indices price trend direction.
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