Learning to draw the trend line in the Forex market is a very tough task. Most people think they can do so without doing the proper market analysis. But if you look at the professional trader, you will notice they are following some strategic steps to analyze the trend of the market. Being a novice trader, you might think you know everything about this market. But when you will try to draw the trend line things will become difficult.
In this article, we are going to discuss some amazing steps which will allow you to draw the major trend line like a pro trader. Without any delay, let’s see how we can draw the major trend like a professional trader.
Select the higher time frame
Time frame selection is the most important factor for currency traders. And if you take the trades in the stock market, you must learn to evaluate the market data systematically. Instead of selecting the lower time frame, we strongly recommend that you learn to trade in the higher time frame. The trend formed in the higher time frame is much more accurate and provides better trading signals. Though the higher time frame trading is very time-consuming, it can give you a more accurate reading. If you use the trend line in the lower time frame, you are going to lose money most of the time. You might not be able to find the perfect trend at all.
Trade with the robust platform
Without having access to a robust platform, you will never learn to draw the major trend line like a pro trader. Read more here and see the features of the high-end trading platform. Once you are certain about the quality of your trading platform, learn to use the trend line tool in the demo account. Without learning to use that tool you will never learn to draw a valid trend line. Some of you might think that a demo trading account is going to waste your time. But the professional traders think differently. To them, a demo trading account is the best way to learn the use of modern tools available in the trading platforms.
Highs and lows
To find the existing trend in the market, you have to analyze the highs and lows of the market. Without learning to analyze the highs and lows, you will never learn to trade the market in a disciplined way. Smart traders often think they know everything about this market. But once they start randomly taking the trades, they realize, highs and lows are the most important factor that a trader needs to analyze. Always remember, trading is all precision.
Connecting the points
To find the bullish trend line, you need to connect higher lows in the market. Make sure you connect three or higher lows. If you draw the trend line based on two connecting points, you are going to trade the market with a weak trend line. On the contrary, to draw the bearish trend line, you need to connect the higher lows in the market. And make sure you are finding these highs and lows in the market in the higher time frame only. Once you do that you should be able to find the important support and resistance level with a high level of accuracy.
The slope of the trend line
If the slope of the trend line is too steep, chances are high that the trend will reverse. An ideal trend line should have a slope around 45 degrees and the price should be respecting the trend line most of the time. And make sure you draw the trend line in the H4 or daily time frame. If you draw it in the lower time frame, the slope will not be ideal for trading. And remember, the trend lines are not the perfect tools that can guarantee big profits.