There is a common expression in trading: “the trend is your friend”
The term “trend” refers to the prevailing momentum of a particular instrument, whether it is moving up or down. Markets are constantly fluctuating, but do not move in a straight line and for this very reason trading with the trend is a simple way to avoid over trading and effectively identify genuine opportunities.
How to draw a trend line:
Trend lines should be drawn outside of the current price action, without the trend line piercing any previous candlesticks. This
gives an objective indication of the prevailing market momentum. As a rule trend lines will be drawn above price action in an
uptrend and below the price action in a downtrend, as demonstrated below.
TIP: DRAW TEND LINES ON WEEKLY, DAILY, 4H (TOP DOWN ANALYSIS)
WHEN PRICE ACTION HITS THE TREND LINE, ENTER THE TRADE IN THE DIRECTION OF THE TREND: