Trend Lines
Like with every aspect of trading, it’s always best to focus on the big picture, and this couldn’t be more true when it comes to drawing trend-lines.
Due to the highly subjective nature of trend-lines, the key to drawing them correctly lies within their visibility. If you find yourself forcing a trend-line, trying to fit it to your own personal liking, the unfortunate reality is you are wasting your time.
For a trend-line to truly work well, it must pop off the chart, becoming visible to the naked eye with ease. The more eyes that are on a trend-line, the higher the probability of that trend-line being respected, as it creates a self-fulfilling prophecy.
The easiest way to find highly visible trend-lines is to zoom out of your charts, whether it be on the daily,weekly, or monthly – and focus on the swing lows & swing highs. Focusing on the big picture, as well as the major turning points in price, allows these highly visible trend-lines to literally pop off the screen
Take the weekly chart of AUD/USD for example.
Notice how by zooming out and looking at the big picture on the weekly chart, we are able to spot the major turning points in price, which are identified by the weekly swing highs & swing lows.
This allows us to visible spot a key trend-line which has been respected over 7x over the last 3 years!
When it comes to trend-lines, focus on what is undeniably evident. The more you have to tinker with a trend-line, the higher the probability your eyes are playing tricks on you.
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