How to Draw Energies Trend Lines & Channels on Energies Trading Charts

Sometimes support & resistances are formed diagonally in a similar way like a staircase. This forms a energies trend which is a sustained movement in one direction either upwards or downward.

A energies trend line depicts the points of support and resistance for the energies price, depending on the direction of the market. For an upward moving energies market energies trend - the trend line will shows the points of support and for a downward moving energies market energies trend - the trend line will show the areas of resistance - energies trend lines are mainly used by many traders to determine these resistance and support levels on energies charts.

A Energies Trend line is a slanting straight line that connects two or more price points and extends into the future to act as a zone of support or resistance for the trading price movement. There are two different types of energies trend lines: upward energies trend line and downward energies trend line. Energies trend line is an aspect of energies trading technical analysis that uses energies line studies to try and predict where the next energies price move will head to. A trader must know how to draw & interpret signals generated by this trend line tool.

The basis of this energies technical analysis is based upon the idea that energies markets move in trends. Energies trend lines are used to show 3 things.

• The general direction of the market - up or down.
• The strength of the current energies trend - and
• Where future support and resistance will be likely located

If energies trend lines forms in a certain direction then the energies market usually moves in that direction for a period of time until a time when this energies trend line is broken.

Drawing these trend-lines on a energies chart shows the general energies trend of the energies market which can either be upward or downward.

Below is an example of how to draw these trend lines on energies charts

Guide:How to Draw Upward Energies Trend Line and Trade Upward Energies Trend Move

Course: How to Draw Downward Energies Trend Line and Trade Downwards Energies Trend Move

The MT4 energies trading software provides energies charting tools for drawing these trend lines on energies charts. To draw energies trend lines onto a energies chart, energies traders can use the energies tools provided on the MT4 software that is shown below.

To draw energies trend-lines on a energies chart just click the Energies MetaTrader 4 Draw Energies Trend Line Tools as shown above on the MT4 platform technical analysis software and select point A where you want to start plotting the trend-line & then point B where you want the trend line to touch. You can also right click on trend line & on properties option select option to extend the ray by ticking 'ray check box', if you don't want to extend the trend-line, then uncheck this option in your MT4 platform. You can also change other energies trend line properties such as color and width on this property popup window of the trend line properties. You can download MT4 software and learn energies trendline technical analysis with it.

The energies trend is your friend. Is a popular saying among investors because you should never go against it. This is most reliable method to trade Energies Trading because once prices begin to move in one direction they can move in that particular direction for quite some time - therefore using this trend trading technique presents opportunity to make profits from energies trading market.

Principles of How to Draw Energy Trend Lines

1. Use energies trading candlestick charts

2. The points used to draw the trendline are along the lows of the energies price bars in a rising energies market. An upwards bullish energies trend move is defined by higher highs and higher lows.
3. The points used to draw the trendline are along the highs of the energies price bars in a downward falling market. A downward bearish energies trend move is defined by lower highs and lower lows.
4. The points used to draw energies trend lines are extremes points - the high or the low energies price. These extremes are important because a close beyond the extreme tells investors the energies trend of energies might be changing. This is an entry or an exit signal.
5. The more often a energies trend-line is hit but it is not broken, the more powerful its signal.

There are two main ways of trading this energies trend-line technical analysis setup:

1. The Energies Trend Line Bounce - Energies Trend Line Bounce
2. The Energies Trendline Break - Energies Trend Line Break

Technical Analysis Methods of Energy Trend Lines

The energies trend line bounce is a continuation energies signal where energies price bounces off this energies trend line to continue moving in the same direction. In a downward energies trend, the energies market will bounce downwards after hitting this energies trend line level which is the resistance level. In an upward energies trend, the energies market will bounce upwards after hitting this energies trend line level which is the support level.

The energies trend-line break is a reversal signal where the energies market goes through the trend line & starts moving in the opposite direction. When a energies up trend is broken then sentiment of the energies market reverses and becomes bearish and when a energies down trend is broken then the energies market sentiment reverses and becomes bullish.

For very strong energies trends, after this energies trend-line break trading signal, the energies price will consolidate for some time before moving in the opposite direction. For short term energies trends then this energies trendline break energies signal will mean energies price may reverse immediately.

In energies, both the trend line bounce and the trendline break that are used in technical analysis charts are based upon these trend line levels being support and resistance levels.

Entry, Exit & Setting stops:

This energies trend line trading method is used to determine good entry and exit points, protective stops are placed just above or below these trend lines. The energies trend line bounce is a low-risk entry method used by traders to place entry trades after energies price has retraced. Energies trades are setup along these trend line levels and a stop loss placed just above or below these trend lines.

The energies trend-line break is a crucial technical indicator of possible energies trend reversal. When the trend line is broken the energies price starts move in the opposite direction. This provides an early exit signal for energies traders to exit their open trades and take profits. When there a penetration of these trend line levels, it is a signal that the energies price can start moving in opposite direction.

Unlike other energies technical analysis indicators there is no formula used to calculate the trend line, this energies trend line formation is just drawn between two chart points on the energies chart.