If you want to find good trading opportunities, then you must trade near the Trend Line.
This allows you to have a tighter stop loss on your trades — which improves your risk to reward .
But that’s not all…
Because if you combine Trend Line with Support and Resistance, that’s where you find the best trading opportunities.
Now you might wonder:
“So when do I enter a trade?”
Well, you can use reversal candlestick patterns (like the Hammer, Bullish Engulfing, etc.) as your entry trigger.
This means you’re only entering a trade when the market has “bounced off” the Trend Line and likely to move higher.
- When you draw a Trend Line: 1) Focus on the major swing points 2) Connect the major swing points 3) Adjust the Trend Line and get as many touches as possible
- The steepness of a Trend Line gives you clues about the market condition so you can adjust your trading strategy accordingly
- The Trend Line Breakout technique helps you time your entry in a trending market
- You can use a Trend Line to trail your stop loss and ride massive trends
- If a Trend Line breaks, wait for the re-test and see if it holds. If it does, the market is likely to reverse in the opposite direction
