Easypipmaker Robot daily trade picture 29oct2010

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Is it trend line can act as our BUY or SELL entry?

One of our FAQ is whether trend line can act as our entry or not? The Answer is NO! We only use the trend line as a guideline to identified the current trend. How to do this?

Usually we will draw trend line at higher time frame first such as Daily and H4, from that i will know whether market still in the uptrend or downtrend or even sideways. After i know the current trend, then i will zoom to lower TF (time frame) H1, M15,M5 to find a perfect entry.

Sometimes, price will just break or test support/resistance level and then market not change the the direction. 

At our previous post we mention that we also use trend line as our emergency exit line to take profit or cut loss.

Trendline as support and resistance level

Trend line can act support and resistance level. Most of trader will use support level for BUY entry and resistance level as a SELL entry.

Support

Support is defined as a price has difficulty to break below, and is so named because it supports or holds up the price. Trend lines show potential support by the extension of the trend line into the future. Support is most often shown by upward trend lines, but can also be shown by sideways trend lines. A strong trend line will keep the price above the trend line and its associated support, until the support weakens, at which time the price will break through the trend line, and trade below the trend line and its associated support.

Resistance

Resistance is defined as a price has difficulty to move upward, and is so named because it resists or holds down the price. Trend lines show potential resistance by the extension of the trend line into the future. Resistance is most often shown by downward trend lines, but can also be shown by sideways trend lines. A strong trend line will keep the price below the trend line and its associated resistance, until the resistance weakens, at which time the price will break through the trend line, and trade above the trend line and its associated resistance.

At example above, when price break the DTL actually market giving a signal they will change the move, in this case market will make u turn and go upward. Its clearly show as long as the market hold the DTL, you can keep your SELL trade but beware if price break above the DTL you should consider to take your profit or cut loss your trade.

Usually we using dtl or utl as our emergency exit line.

Drawing uptrend line and downtrend line

Drawing a trend line on a chart gives us very valuable information. Trend line is not only show us current market trend (uptrend or downtrend) but also support and resistance levels for market price. 

For downtrend line, draw a line from the higher point (1st point) to the lower point (2nd point) , the line must not/cannot not pass through prices between the 1st point and 2nd point. 

For uptrend line, draw a line from the lower point (1st point) to the higher point (2nd point) , the line must not/cannot not pass through prices between the 1st point and 2nd point. 

Simple right?? here is the picture.  

Welcome to easypipmaker

This is our 1st post in this blog. We are happy because finally we manage to spend our time writing in this blog. We will do our best to share about forex and easypipmaker robot in this blog.

Basically our trading system are not using any indicator but only use Trend line and Fibonacci. For fundamental analysis you can just read important news releases which you can surf at www.forexfactory.com

The purpose of this blog is only to share with you our idea and technical analysis we've done for some pair but mostly we pick eur/usd, audusd, usd/jpy. Whatever post in this blog are NOT TRADE CALL. your comment are most welcome.

See you in the next post, thank you.