Using Trendlines to Trade

• In an uptrend, traders look to buy when the price touches the trendline and bounces upward.
• In a downtrend, traders consider selling when price touches the trendline and starts falling.

Trendline Subjectivity

Drawing trendlines can be subjective. Different traders may draw them differently depending on how they interpret price swings. The key is consistency and testing what works best in your strategy.

What Is a Trend Channel?

A trend channel is a tool used by traders to set targets. It involves drawing a parallel line to the existing trendline:

• The parallel line acts as a projected resistance (in an uptrend) or support (in a downtrend).
• Channels help visualize how far the price might go and where you can take profits.
  

Example Use Case

Let’s say you entered a long position after price bounced from an upward trendline. You can draw a parallel channel line to estimate your target price. Channels offer a structured way to plan entries and exits.

Summary

Trendlines and trend channels are powerful tools in forex trading:

• They help identify direction, support, and resistance
• They give entry signals when price bounces
• Channels provide potential exit targets

Practice drawing trendlines and channels on real charts to develop your skill and trading edge.