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