A trend is the general direction of a market. Unless something happens to change the trend, a currency or commodities price tends to move within a channel. A channel is formed by a Support level and a Resistance level. The Support level is the trendline for the Lows and the Resistance is the trendline for the Highs. Adding in additional Trendlines, between Support and Resistance, using the Ray Tool builds addition points of interest.
Trendlines (how to draw)
Using the @alphamindfx Method with the AM All-In-One Indicator
Trendlines (how to draw)
- Identify 2 Lows or 2 Highs
- The Support Trendline can be identified as soon as 2 Lows are formed and Resistance Trendline can be identified as soon as 2 Highs are formed.
- Traders use the Ray Tool instead of the trendline tool to extend trendlines into infinity (Check off “extend right” in the settings by double-clicking on the ray). This is important because traders use trendlines to assist them with locating future trade opportunities as well as locating important areas in current trades.
- Traders always draw trendlines from candle wick to candle wick. By using the magnet tool in TradingView, this allows locking on to the candle wick to be much more easy and accurate.
- A best practice is to touch as many points as possible even if other candle wicks are cut through along the way.
- Always draw multiple trendlines for Lows and Highs on different time frames.
- A minimum of 2 touches is required for a valid trendline. The more touches the better.
Using the @alphamindfx Method with the AM All-In-One Indicator