How to Draw a Indices Trend Line on a Chart

How to Draw a Indices Trendline on a Chart - How to Draw Indices Trend Lines on Stock Indices Charts

Principles of How to Draw a Indices Trendline on a Chart

1. Use candlestick stock indices charts to draw indices trend lines

2. The points used to draw a indices trendline on a stock indices chart are along the lows of the stock indices price bars in a bullish stock indices market. An upward bullish indices trend is defined by higher highs & higher lows.
3. The points used to draw a indices trendline on a stock indices chart are along the highs of the stock indices price bars in a bearish stock indices market. A downwards bearish indices trend is defined by lower highs & lower lows.
4. The points used to draw indices trendlines on the stock indices charts are the extremes points - the high or the low indices trading price. These extremes are important because a close beyond the extreme chart points tells indices traders the indices trend of the indices trading instrument might be changing. This is an entry or an exit indices trade signal.
5. The more often a indices trendline on a stock indices chart is hit but it's not broken, the more powerful its indices trend signal.

Example 1: How to Draw a Upward Indices Trendline on a Chart

To draw an upward indices trendline on a stock indices chart use two support points in a bullish up-wards indices trend so that to draw the upward trend line & then extend the trend line as illustrated and shown below. The upwards indices trendline on a stock indices chart will show the general direction of stock indices trading prices & as long as stock indices trading price is above this up-wards trendline then the upward trend will remain intact - bullish upward indices trend.

If indices trading prices move below the up-wards trendline which is the support level for the bullish upward indices trend then stock indices traders should close all their open stock indices trades - because this may be a indices trend reversal signal. In an upwards indices trend stock indices trading price should generally stay above support level which is marked by the up-wards trendline on the stock indices charts.

Draw a Up Indices Trend Line on a Chart in Indices Trading

How to Draw an Upward Indices Trendline on a Chart - How to Draw a Indices Trendline on a Chart

Example 2: How to Draw a Downward Indices Trendline on a Chart

To draw a downwards indices trendline on a stock indices chart use two resistance points in a bearish down-wards indices trend so as to plot the down-wards indices trendline & then extend the trendline as shown below. The downwards indices trendline on a stock indices chart will show the general direction of stock indices trading prices & as long as stock indices trading price is below this downwards trend line then the downward indices trend will remain intact - bearish downward indices trend.

If indices trading prices move above the down-wards indices trendline which is the resistance area for the bearish downwards indices trend then traders should close all their open stock indices trades - because this may be a indices trend reversal signal. In an downward indices trend stock indices trading price should generally stay below the resistance area which is marked by the down-wards trendline on a stock indices chart.

Draw a Indices Trading Down Trend Line on a Chart in Indices Trading

How to Draw a Downward Indices Trendline on a Chart - How to Draw a Indices Trendline on a Chart