|
Trend lines in emini trading can be compared to the current of a river or wind support. Making progress certainly becomes easier in such case. There are three types of trend lines – slope trend lines, bullish trend lines and range trend lines. Although S&P500 Eminis initially had weak housing start numbers they have continued to climb ever since. However, this is nothing but a trend and it is a widely known fact that all trends eventually get broken. So the question here is: How long will this trend remain intact? The Basics Of Trend Lines Trend lines are powerful yet simple tools. Traders use them to highlight a price movement’s general direction for whatever time frame they are currently observing. The notion that price moves, either up or down, in trends serves as the foundation for trend lines. Based on common sense and technical analysis it is assumed that prices will continuously move in the direction of the trend until something ends up breaking the trend. When trend lines are being drawn it is recommended that the trend in three time frames should be observed. The timeframes that are used are relevant only to the time frame that is actually being traded by a trader. When it comes to day trading, drawing trendlines on a daily chart, hourly chart and finally on the time frame that is being used to execute the trades is a good idea. It is possible to substitute range bars, ticks, or even volume for the time element but for now, it is best to stick with merely the basics of trend lines. Trend lines should be considered as the current of a river or the wind at one’s back. It is certainly possible to build character if a person swims upstream or runs into a headwind but making progress is not easy at best. Thus, when it comes to trend line trading, traders should learn to simply “go with the flow.” Trend-Line Defined: In simple words, trend lines are just straight lines that traders draw on a chart in order to connect two price highs or lows to each other. The initial trend line can only be drawn where there are two points, while the validity of the line is confirmed by another third point. As better price keep touching the line, while holding for numerous bars relevant to the time a trader is observing and without breaking above or below, then the trend-line becomes more significant. There are three types of trend lines, namely down slope trend lines known as bearish trend lines, up slope trend lines known as bullish trend lines and sideways trend lines known as range trend lines. Primarily, a trend is used so that the existence, or the start of a trend can be identified and so that it can be seen if or when the trend itself is changing. The wish to draw the perfect trend-line can overburden Emini traders, but they should avoid letting this happen. Traders can simply begin connecting swing highs and lows on their chart. With practice and sufficient period of time, Emini traders will begin to see some very remarkable things happen to their Eminis charts if they use trend lines as the powerful yet simple tools they are meant to be. Author of this article enjoys listening to the CFRN Emini Futures Live Market Commentary each day and also watching the CFRN Professional Emini Traders place live trades in their Live Emini Trading Room.
Related Articles -
Emini traders, Emini,
| 
