Upward Trend Lines & Channels - MetaTrader 4 Tools for Drawing Trend-Lines and Channels
An upwards forex trend line is drawn below the forex trend pattern by connecting at least two lows. This upward forex trend line will draw a line that show the general direction of the market.
The forex trading example below shows how forex price moves when it is moving in a bullish market. The forex price will move upward forming support levels.
Since the forex trading market moves in a zigzag manner forex traders normally draw a forex trend-line which shows the general upward direction of the market.
A forex uptrend occurs when the fore price makes consecutive higher highs and higher lows. Each price high being higher than the previous high - higher high , and each low is higher than the previous low - higher low.
Forex Uptrend-lines gain more validity each time price touches this upwards trend line but does not penetrate it. A forex uptrend remains in place until this series of higher highs and higher lows is broken.
A downside penetration of an upward forex trendline is a technical sell signal, and usually the first indication that an upward forex trend may soon end.
Drawing an Upward Forex Trend Line - Upward Forex Trend Line MT4 Trend Line Indicator
When the forex market moves upwards it forms higher highs & higher lows forming a bullish market movement - Upward Forex Trend. An upward forex trend-line can then be plotted by connecting these higher lows.
To draw this upwards trend-line setup we use supports. To draw the upward trendline correctly two support zones are needed. When forex price touches the upwards trend line we buy and place stop loss orders just a few pips below the upwards trend line. Forex trading example below shows an example of an upward forex trend line.
The forex upward trend line setup will show the general direction of the market as bullish therefore forex traders will only open buy long forex trades as long as price is within this upward trend bullish market setup and within the support levels. These support levels are the levels where if the forex market retraces then these points will provide strong supports for the price. This is why many forex buyers will wait until forex price retraces downward and hits these retracements levels market the upward trend line to open buy forex trades. Forex trades opened at this support levels have a high Risk to Reward Ratio with minimum draw down.
In the above upward trend line forex trading setup the trader would have opened buy/long forex trades from the signals generated at the support1, support2, support3 and these forex trades would have made a lot of trading profits with minimum amount of drawdown/retracement.
Upward Forex Channel - Upward Forex Channel MetaTrader 4 Channel Indicator
An upwards forex channel is plotted by drawing a line that is parallel to the upward trend line & then adjusted to touch the top boundary of the forex price movement. This then forms an upward forex channel and as long as the FX price stays between these two trend channels the bullish upward market movement will continue heading upwards.
Trading the Forex Channel - How to Trade Upward Forex Channel
This upwards forex channel is used by traders to show levels where it is best to take profits. Traders will take some profit once the price touches the upper channel and wait for another retracement before opening a long buy trade again.
MT4 Tools for Drawing Trend Lines & Channels
The Forex MetaTrader 4 Trend Line Indicator drawing tools to draw these trend lines & forex channels setups on the MT4 are located on the MetaTrader 4 drawing tool bar within the MetaTrader 4 platform, To access this MT4 tool bar if it is not activated on your forex platform, Click in "View" Next to "File" menu at the tops left corner of MT4 platform and click View, Then Click on Tool-bars, Then Check "Lines Tool Bar" by clicking on it.
Shown Below is the screenshot Image of the MT4 drawing tool bar. To draw a forex trend-line on a forex chart click on this MetaTrader 4 trend-line plotting tool and select the point where you want to plot the trend line.
This is one of the learn forex technical analysis lesson among the many learn forex trading tutorials on this website located on the side navigation menu, where you will learn how to draw forex trend lines & analyze these trend lines setups.
