[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”3.22″ global_colors_info=”{}”][et_pb_row admin_label=”row” _builder_version=”3.25″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”3.25″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.12.0″ _module_preset=”default” global_colors_info=”{}”]
[/et_pb_text][et_pb_text _builder_version=”4.12.0″ _module_preset=”default” global_colors_info=”{}”]Alright, folks. So I had a question from a member on using Trend Lines. And it’s really, in depending on who you talk to, could be science, it could be more art. But there are ways proper ways to actually draw trend lines, and actually had to use them. But in a general sense, it gives me an idea or extra confirmation, I use it as an extra confirmation tool and apply that when I get a quote unquote signal off of some of the other tools that I use. Some of those obviously, are the 123 bottoms, which we are in right now with the CEO 123 bottom here on this four hour chart of the bonds, basically sitting right around here, break even. And then I also use a tool called divergence, you can see we have a bullish divergence buy signal right here. We also have divergence sell signals coming in right here, what is this looks like 11, eight, around 11 911 811 Nine time period. But I don’t just blindly take say these as a sell signal or these 123 Bottoms as a buy signal or 123 sell signals as a sell signal, what I like to do is apply that additional filter or layer, if you will, of confluence, which one is a trendline. Now I’ve got a couple of other things that I use for extra confirmation or Confluence. But trendline analysis is a very simple tool that helps keep me out of some potentially bad trades. Now we don’t avoid all trades, of course, but it helps me stay out of some false setups that do occur. Now, using simple trendline analysis is very simple, we need to connect a minimum of three swing higher swing lows in an uptrend. So we’re going to connect this here. So we’ve got one low, two lows, and three lows. And then when we get that break, and then if we already have this drawn, and then we start to get these divergent signals, we know that we’re not taking until we get that trend line break, which is what we get here. Now, in a perfect world, I like to see a retest of the trendline. Sometimes we don’t always get that now, over here, we’ve got, we’ve got a bunch of little minor trends. Going back and forth, we’ve got swing low, swing low swing low. And then we finally get that break to the downside. So here we are, again, for looking for long positions or long trend line. Or to draw a downtrend line is we’re looking for lower swing highs. So we’ve got 123, and then a little fourth touch right here and possibly even a fifth. Now you can see that we had a divergence by signal come in right here. But we would not honor that because we are still trading below the trend line, we finally get that push back up, which then starts to form a 123 bottom formation. And now that we are above that trendline, we can consider new long positions. And notice that once we have that trend line break, how do we know when we can draw a new trend line when we can connect a minimum of three higher lows. So we can do, we can start from this low here and draw that up. And we have 12345 So as long as this trend line is respected and bouncing off this trend line, we can still consider new Long’s we start breaking below the trend line, that’s fine. We’ll want to either tighten up shorts or considering exiting and looking for new, short positions.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section]
