Upward Indices Trend-Lines and Channels
An upwards indices trend line is drawn below the indices trend pattern by connecting at least two lows. This upward indices trend line will draw a line that show the general direction of the market.
The diagram below shows how stock indices price moves when it is moving in a bullish market. The stock indices price will move upward forming support zones.
Since the stock indices trading market moves in a zigzag manner indices traders normally draw a indices trendline which shows the general upward direction of the market.
A indices up trend occurs when the fore stock indices trading price will form consecutive higher highs & 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 Up indices trend lines gain more validity each time stock indices price touches this upwards trend line but does not penetrate it. A up trend remains in place until this sequence of higher highs and 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 stock indices trading market moves upwards it forms higher highs & higher lows forming a bullish market movement - Upward Indices Trend. An upward indices trend line can then be plotted by connecting these higher lows.
To draw this upwards trend-line setup we use supports. To draw the upward trend line correctly two support levels are needed. When stock indices price touches the upwards trend line we buy and place stop loss stock indices orders just a few pips below the upwards trend line. Diagram below shows an example of an upward indices trend line.
The upwards indices trend line setup will show the general direction of the market as bullish therefore indices traders will only open buy long stock indices trades as long as stock indices price is within this upward trend bullish market setup and within the support areas. These support levels are the levels where if the stock indices trading market retraces then these points will provide strong supports for the indices price. This is why many indices buyers will wait until stock indices price retraces downward and hits these retracements levels market the upward trend line to open buy stock indices trades. Indices trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.
In the above upward indices trend line stock indices trading setup the trader would have opened buy/long stock indices trades from the signals generated at the support1, support2, support3 and these stock indices trades would have made a lot of profits with minimum amount of draw-down/retracement.
Upward Stock Indices Channel
An upwards indices channel is plotted by plotting a line that is parallel to the upward trend line & then adjusted to touch the top boundary of the stock indices price movement. This then forms an upward indices channel and as long as the stock indices trading price stays between these two market trend channels the bullish market movement will continue to move upwards.
Trading the Stock Indices Channel
This upwards indices channel is used by stock indices traders to show levels where it is best to take profits. Traders will take some profit once the stock indices price touches the upper channel and wait for another retracement before opening a long buy indices trading again.
Indices Trend Lines MT4 Indices Trend Line Indicator
The Stock Indices MT4 Trend Line Indicator drawing tools to draw these trend lines & indices channels setups on the MetaTrader 4 are located on the MT4 drawing tool bar within the MT4 platform, To get this MetaTrader 4 tool bar if it is not activated on your indices trading software, Click on "View" Next to "File" at the top left corner of MT4 platform 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 trendline plotting tool and select the point where you want to plot the trend line.
This is one of the learn stock indices technical analysis lesson among the many learn indices trading tutorials on this website located on the side navigation menu, where you will learn how to draw indices trend lines & analyze these trend lines setups.
