📉 Using Trendlines for Trading Opportunities 📈
Trendlines are one of the simplest yet most powerful tools in technical analysis. A well-drawn trendline can act as dynamic resistance or support, helping traders identify short and long opportunities.
How to Trade with Trendlines
🔻 Shorting the Trendline Touches
If an asset is in a downtrend, draw a yellow trendline by connecting the lower highs.
Every time the price touches the yellow trendline, it’s a potential shorting opportunity.
Take profit near the local support or recent swing low.
Stop-loss should be placed slightly above the trendline to avoid fakeouts.
🔺 Longing the Breakout
If the price breaks above the yellow trendline with strong momentum, it may signal a trend reversal.
Look for confirmation (high volume, retest of the trendline as support).
Enter a long position and set targets at key resistance levels.
Place a stop-loss below the breakout point in case of a fakeout.
Example Chart Setup
Yellow line = Downtrend resistance trendline.
Short Entries = Price rejection at the trendline.
Breakout Long Entry = Once the price closes above the trendline with volume confirmation.
🚀 This strategy works best when combined with other indicators like RSI, moving averages, or volume analysis.
Trendlines are one of the simplest yet most powerful tools in technical analysis. A well-drawn trendline can act as dynamic resistance or support, helping traders identify short and long opportunities.
How to Trade with Trendlines
🔻 Shorting the Trendline Touches
If an asset is in a downtrend, draw a yellow trendline by connecting the lower highs.
Every time the price touches the yellow trendline, it’s a potential shorting opportunity.
Take profit near the local support or recent swing low.
Stop-loss should be placed slightly above the trendline to avoid fakeouts.
🔺 Longing the Breakout
If the price breaks above the yellow trendline with strong momentum, it may signal a trend reversal.
Look for confirmation (high volume, retest of the trendline as support).
Enter a long position and set targets at key resistance levels.
Place a stop-loss below the breakout point in case of a fakeout.
Example Chart Setup
Yellow line = Downtrend resistance trendline.
Short Entries = Price rejection at the trendline.
Breakout Long Entry = Once the price closes above the trendline with volume confirmation.
🚀 This strategy works best when combined with other indicators like RSI, moving averages, or volume analysis.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.