How Do I Draw Commodities Trend Lines Correctly?

How to Draw Commodities Trend-Lines Correctly - Detailed Guide on How to Draw Commodities Trend Lines Correctly

Principles of How to Draw Commodities Trend Lines Correctly

1. Use commodities candlestick charts

2. The points used to plot are along the lows of the commodities price bars in a bullish commodities market. An upwards bullish commodity trend is defined by higher highs & higher lows.
3. The points used to plot are along the highs of the commodities price bars in a bearish commodities market. A downwards bearish commodity trend is defined by lower highs & lower lows.
4. The points used to draw commodity trend lines are extremes points - the high or the low commodities trading price. These extremes are important because a close beyond the extreme tells commodity traders the commodity trend of commodity might be changing. This is an entry or an exit commodities trade signal.
5. The more often a commodity trend-line is hit but not broken, the more powerful its commodity trend signal.

Example 1: How to Draw Commodities Upward Commodities Trend Line Correctly

To draw an upwards commodity trend line correctly use 2 support points in a bullish upwards commodity trend so as to plot the upward commodity trend line & then extend the commodity trend line as shown below. The upwards commodity trendline will show the general direction of commodities trading prices & as long as commodities trading price is above this upward commodity trend line then the upward commodity trend will remain intact - bullish upwards commodities trend.

If commodities trading prices move below the upwards commodity trend line which is the support level for the bullish upward commodity trend then traders should close all their open commodities trades - because this might be a commodity trend reversal commodity signal. In an upwards commodity trend commodities trading price should generally stay above the support area which is marked by the upwards commodity trend line.

How to Draw Commodities Trendlines Correctly for Upwards Commodities Trend

How to Draw Commodities Upward Commodities Trendline Correctly - How to Draw Commodities Trend Lines Correctly

Example 2: How to Draw Commodities Downward Commodities Trend Line Correctly

To draw a downwards commodity trend line correctly use two resistance points in a bearish downward commodity trend so as to plot the downwards commodity trend line & then extend the commodity trend line as displayed below. The downward commodity trendline will show the general direction of commodities trading prices & as long as commodities trading price is below this downwards commodity trend line then the downward commodity trend will remain intact - bearish downwards commodities trend.

If commodities trading prices move above the downward commodity trend line which is the resistance level for the bearish downward commodity trend then traders should close all their open commodities trades - because this might be a commodity trend reversal commodity signal. In an downwards commodity trend commodities trading price should generally stay below the resistance area which is marked by the downwards commodity trend line.

How to Draw Commodities Trend-Lines Correctly for Downwards Commodities Trend

How to Draw Commodities Downward Commodities Trendline Correctly - How to Draw Commodities Trend Lines Correctly