Downwards Energies Trend-Lines & Channels

How to Draw Downward Energies Trend Lines on Energies Trading Charts

A downwards energies trendline is plotted above the downward trend pattern formed by consecutive lower highs, the downward energies trendline must connect at least two highs, with the most recent high being lower. For our energies downward trend examples we shall use the MT4 technical analysis software energies charts to illustrate example of downward energies trend.

Since energies price moves down in a zigzag manner energies traders normally draw a downward energies trendline which shows the general downward direction of the energies prices. In energies trading market technical analysis, this general energies price direction is referred to as the TREND by traders. In energies technical analysis definition we can define this energies down trendline is plotted on a Energies Trading chart showing the resistance areas (bearish market direction).

A energies down trend occurs when the price forms a series of lower highs and lower lows. Each price high is lower than the previous high - lower high, & each low is lower than previous low - lower low therefore showing bearish energies trading price movement.

Energies Trading Down energies trading trend-lines gain more validity each time energies price touches the downward energies trend line but does not penetrate the trend line. A down trend remains the general direction until this series of lower highs and lower lows is broken.

In energies technical analysis, An up side penetration of a energies down trend line is a technical buy signal, and usually the first indication that the bearish direction of energies prices may soon reverse.

Drawing a Downwards Energy Trend Line

When it comes to learning how to draw and learning energies technical analysis of energies charts, you need to know that when the energies market is bearish it forms lower lows and lower highs forming a downward general market direction. These are the points that are used to draw the downward energies trend line.

To draw this downward trend setup we use resistances and to do it correctly two resistances are needed. When energies price touches this energies trend line, then we sell and place stop loss just a few pips above the sloping resistances:

Trading This Downward Energies Trend Market Move

When trading with this energies trend line trading method, this energies trend line setup will show the general direction of the market as downwards therefore energies traders will only open short sell energies trades. These are the levels where if energies price retraces then these points will provide strong resistance. This is why many short sellers will wait until energies price retraces upwards and hits these retracements levels to open sell energies trades. Energies trades opened at these levels have a high Risk to Reward Ratio with minimum draw down.

For Example, in the above energies example, a trader would have opened short sell signals at the resistance1, resistance2, resistance3 and these sell energies trades would have made a lot of profits with minimum amount of drawdown/retracement.

How to Draw a Energy Trading Downward Channel

A energies downward channel is plotted by plotting a line that is parallel to the downward energies trendline & then adjusting it to touch the bottoms boundary of the energies price movement. This then forms a downwards energies channel and as long as a price stays between these 2 channels the general energies market direction is intact the energies market direction will continue being bearish.

Trading The Downwards Energies Trading Channel

The downward energies channel is used by traders to show levels where it is best to take profits. Traders will take some profit once the energies price touches the lower channel and wait for another retracement before opening a short sell energies trading again.

MT4 Tools For Drawing Energies Trading Channels

The energies tools to draw these energies channels studies on the MT4 energies charts can be found on the Lines Toolbar within the MT4 platform, to access this MT4 tool bar if it is not activated on your MT4 Energies Trading Platform, Click in 'View' Next to 'File' at the tops left corner of the MetaTrader 4 Energies Trading Software & click View, Then Click on Toolbars, Then Check the Lines Tool Bar by clicking on it.

Below is the screenshot of these MT4 tools: just click on this MT4 channels drawing tool and select the point to where you want to place this energies channels tool on the energies chart.

MT4 Technical Analysis Charts - Downward Energies Trading Channels

MT4 Toolbar - MT4 Tools for Drawing Energies Trend-Lines & Energies Trading Channels used to obtain these trend line drawing tools is shown above, to draw these trend line setups or energies channels, just select the above MT4 energies trend line drawing tools shown on the MT4 software and select the two points where you want to draw the downward trend line.

This energies trend line energies strategy is one of the simplest and popular energies technical indicators used by traders to analyze the energies market energies trend direction.