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Trend Lines

This article was originally contributed by the archived community member Daft Gorilla. We no longer maintain contact details for the original author. The content has been fact-checked and updated for accuracy by our editorial team.

10/17/12

Hello again! I hope trading is going well for everyone and if not, I would like to think you are at least learning from your mistakes and getting better! Today I decided instead of just uploaded pictures of my wins I would uploaded a screenshot of an important but very underestimated tool for anyone’s trading arsenal… TREND LINES!

A “trend line” is a line drawn creating a support or resistance level on all of the lows and or highs in any particular trend. The purpose of a trend line is to make it easier on yourself while trading to see how the highs and lows of the trend correlate to each other in the trend as a whole. Trend lines give you valuable support or resistance levels where price could be expected to turn around. When a trend line is “broken” (when price closes above or below your trend line of support or resistance) you might also expect a strong move in that particular direction.

binary options trend lines

In the picture I uploaded, you will see a few messy lines running through everywhere that don’t really seem to make sense.. At first anyway. The line I would like everyone to pay attention to is the one that is sloping downward along with the arrows I added. You will see that the trend line outlines the lows of this short term trend. I used the arrows to demonstrate how price bounces off of this level and it is treated much like a support level for price even as it trends downward. In this particular scenario you would of made 4 winning trades just off of the trend line alone. The other lines you see are also trend lines, however, they are for a much larger time frame, which is why they don’t seem to make sense in that picture so just ignore them.

So… Regardless of what binary options charting software you prefer, I would be willing to bet that there is already a built in line feature that can be used to plot out your trend lines. Give them a try and let me know how it works out for you!