Develop A Good Eye For Trendline Trading Let me first declare my love for trendline trading, support and resistance. These essential trading skills are being used every single day of my trendline trading life and have provided me numerous opportunities in trading. They also require me to take years to develop the skill be good and quick at drawing them. Important Analysis Through Trendline Trading The support, resistance and trendlines plotted thrown together with the price chart will create a huge amount of vital information waiting to be extracted for detailed analysis. This requires lots of time and effort. At the same time, the analysis that is coming up contains subjective elements. In the long run, a trader will be able to identify and plot these levels easily. In order to speed up the learning process it is always good to compare the analysis done to the analysis from software programs such as Autochartist or any other charting software service as a guide. This will greatly sharpen a trader’s observation skills and techniques. The catch is to do the analysis manually first before seeking automation service from other sources. Concepts Of Trendline Trading There are two concepts of trendline trading. Firstly, a trendline trading system can be formed by using trend lines as an entry trigger. In an uptrend, we link the bottoms of swing low and previous swing low together. We will sell the moment price breaks this trend line to the downside. In a similar fashion, this time in a downtrend scenario, we connect the tops of the swing high and the previous swing high together. Now we will be taking a long trading position. The other type of trendline trading is trade on reject. Trading on reject works in the logic that price will revert to its previous ranging environment and breakout is likely to be a wrong breakouts. A group of traders who particularly like this type of trading style are people who tend to fade breakout because they believe that 81% of all breakouts are false breakouts.
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