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How To Draw Trendlines Like A Pro (My Secret Technique) by Rayner Teo

How To Draw Trendlines Like A Pro (My Secret Technique) by Rayner Teo

so in today’s lesson you’ll learn how to draw trend lines like a pro now some of you might be wondering Rayner why should I draw trend lines you know what’s the point of it what’s the use well a few things right if you know to draw trend lines right number one is that sometimes the market may not really respect the support resistance that you’re drawing it tends to respect trend lines better okay so this is where you know context of the market plays a part there are times where you know your support resistance – it’s just not as useful compared to drawing trend lines you find that trend lines are more accurate right given the particular context of the market then your trade so it’s better to know how to draw both trend lines and support resistance number two trend lines help you to identify the long term trend so this is quite a no-brainer if you if you know that a long term trend is up you want to be a buyer because it would naturally no increase the probability of your traits working out so a trend line helps you to identify the long term trend whether it’s a long term uptrend or along them down train and finally trend line helps you to better time your entries and exits okay so if you can identify the market respecting a long term uptrend it it makes sense right to be buying as close as possible near the trend line because this offer you see you write a much more favorable risk to reward okay you can see that you can imagine right if you buy near the trend line your stop-loss is going to be much tighter compared to buying when the price is far away from the trend line where your stop-loss needs to be much larger and you know when the pullback comes when the retracement come chances are you’re going to be stopped out so buying near the trend line offers write a much more favorable risk to reward on your traits so another question is how would do you draw trend lines okay so that’s what I’m gonna cover right now but first if this is the first time you’re watching this video here’s what I want you to do hit the thumbs up button and subscribe to my youtube channel the button is below hit the button and the thumbs up button I mean the subscribe button and the thumbs up button this way we never publish a new video you’ll always be updated ok so let’s get started first thing this is how not to draw a trend line why what is wrong with this well the reason being is that it’s just way too many trend lines on this chart which trendline should you pay attention to well there’s just way too many you gives you analysis paralysis okay so it doesn’t make sense to be drawing your trend lines like this so instead if you follow this simple framework net that I’m about to share with you right trust me your chats will look will look much cleaner and nothing near this one over here so here’s how you do it number one you want to define your time frame that you’re drawing a trend line for example if you are a trader trading off the daily time frame then it makes sense to be trading I mean drawing it on a daily time frame it doesn’t make sense to be drawing a trend line ten or fifteen minutes to thirty minutes on a one-hour time frame because it’s irrelevant to your trading needs you’re trading meats is on a daily timeframe that is your entry timeframe you want to be drawing it on the daily timeframe and optional if you if you want to draw a little bit more lines you can refer to the weekly timeframe just one timeframe higher but right you don’t want to go down to a lower timeframe to draw your trendline always define your time frame first and draw your trendline based on the timeframe that you have defined for yourself number two you want to zoom out your charts because I mean when you look at a chart sometimes you know it’s very easy to get caught up in the current price action like you know what is happening in there now but if you take a step a step back you can see that the price action right it’s much more obvious right when you take a step back so this is why you want to zoom up your charts you wanna see the big picture and we know where you are in the grand scheme of things so zoom up can be a little bit subjective but my advice is to have at least you know 300 bars on your chart I mean depending on the screen move you’re trading from right a trader on the 20 inch screen and a trader on a 50 inch screen right the zoom up can really be very different so to be objective here I would say at least 300 bars on your chart and I’m a tree you wanna draw trend lines that connect a lift at least two major swing points as you know right to draw a trendline you need at least two points and the way I do it is that I want to connect the two major swing points this means that they – swing points I tend to not really pay much attention to it compared to the major string points because the major swing points are the ones that really no help you define the significant long-term trends those trend lines right those are the ones that you want to be paying attention to because they are obvious they are significant the minor ones probably if you go down to a lower timeframe they will be more obvious if you are trading the lower timeframe but on the timeframe that you’re trading on if those – swing points you can tend to treat it as secondary and finally you want to adjust your trendline to get as many to get as many touches as possible kind of like you know making your trendline curve fit the price data that you have okay so you want to adjust it to get as many touch up as possible whether it’s a body or whether it’s the week so I’ll walk you through a few examples so you see how this this works out so first thing first okay so let’s assume that I’m gonna define my time frame as the daily time frame so this is added daily okay so remember I said dude zoom up your chance so let me just reset the chat and I typically use zoom up let’s say 5 times right 1 2 3 4 5 now you can see that clearly right the information that is presented to you is so much different compared to you know when the chat is a zoom in case you see again right this is zoom in alright and you zoom up 1 2 3 4 5 so much at least at 300 bars on your screen more it’s fine so you can see that right now the market right it’s it’s clearer because you’re looking at it from a but I view next thing you wanna do is to draw your trendline so remember I said that you know you want to connect the major swing points so from here I can see this is a major swing point this is one this is one and this is all major swing points okay so let me just walk you through write this let me just draw and explain to you what is a major swinging points major swing points right are levels areas on your chart that you don’t want look at it um it’s in your face it’s like in your face that kind you know if you look at your swing point is it it’s probably not a big listing point you want in your face that is what I mean by major swing point so this is in my face in my face in my face in my face this this this and this obvious right so you can see the all the minor one minor minor minor one this one here is queen my eyes I can look at it all this are – swing points not interested you only want to focus on the major swing points okay so let’s let’s see how to do it okay so again connect I said write minimum is 2 so clearly this another draw from this to this because the trendline is clearly could be in there data right I mean just one look at it maybe before this price action occurred before this price section I would have drawn it in this way but now I can see what happened right I would do draw in a way that you know best fit the current market context so you can see that I can actually draw it like this okay so there’s one touch over here and two touch but if I do that okay I’ll be ignoring this portion here in this portion over here in if you remember that I said I would adjust my trend lines to get the most number of touches to her feet right the current price data so what I’ll do is I’ll adjust the trend line up a little bit higher to this in fact I would even like this okay so there’s one touch over here two three four and five you can see there’s five touches now over here to draw this trend line and this is how I would go about doing it for this $1 Canadian so that’s how it lower trend line another thing to share with you is that you can actually use this function you know just click on this copy-paste a trendline right and you can actually just push it out slightly higher in this case is an uptrend right and you notice that you can now draw your trendline as a zone so you see previously right it’s a kind of like just a mind trigger previously you look at this trendline your mind wouldn’t really look at this as an area but you just copy paste that trendline now you treat it as an area and it might help you write especially for those of you who tends to you know wait for the best absolute prices right again you can just coffee in a little bit all right and now you can treat this whole area that’s a trendline area instead of I mean an area instead of a line on the chat right so this is an area of value on your chart okay so in this example just additional team right you can also control C control V again because I also notice that it’s a trend channel okay so just shift it up higher the way I do the trend channel is the same thing I want to get as many touches as possible so I’ll do it right so if I notice that if I put it to to close over here I got quite a number of touches over here one two okay but here gets invalidated because the price breaks down and goes back in there some breaks out goes back in this one breaks up goes back in now remember we can treat this as an area so just ctrl-c ctrl-v right and you now have another potential area on your charts which is this portion over here so now you just zoom a little bit you can see that right now you know where is the area of value on your chart right the lower portion of the trend line there is an area of value and when the price reaches the upper trench and only know that nose-up level those are price points that you want to be buying you as the market could possibly know reverse from the upward trend channel about here okay so this is how you draw a trend line not example dollar/yen okay same thing right I reset my chart I assume in five times about 300 bars or so one two three four five so what I’m seeing over here is possibly a trend line about this portion here so you can see that you know if I were to take this extreme bar here right this trend line is just gonna end let’s say at this point okay so this is why I’m not concerned right with the extreme highs and lows what I’m only concerned is to make the trend line best feed right given the current price data so I’m not gonna start from this low what I’ll do instead so coffee to get as many touches as possible and if I were to start here I know I can get more touches okay so we can see over here I get 1 2 3 & 4 touch I’ll rather you don’t go with this trend line instead right go for touches over here and once again right a tip for you guys to treat this as a zone and just control C control V and this over here right will be your trend line area on your charts okay so this is for a dollar yet how about another $1 against the Indian rupee same thing so what I’m seeing over here again this is really the zoom mount version connect them the major swing points alright if it makes sense if it doesn’t doesn’t matter you want to draw the trend line where you know best best fit the current price data so from here again right I will not this is one point two and three by three here but if you notice or I can push it down slightly lower and take into consideration these points as well so that’s what I’ll do I’ll put my trendline down lower and connect this these recent points as well and once again if you wanna treat this as an area look it make it easy on your eyes you can just go beep pace and right now you know this over here right it’s an area of value this is an area where the price right has a historically right bounce off and you know reverse lower from there okay you can do this and make this a trend channel just you know shift this down lower to get as many touches as possible in this case all right over here like see you got one touch two and three yep I’m not gonna get this but it’s alright again my main concern is to get the most number of touches in this example another one cool right so I’m just going to walk you through more example so you really can see you know how the way I do it so pops really drawn but never mind let’s look at it with a fresh pair of eyes okay so you can see that previously that would be one over here okay so it doesn’t make sense to draw from here to here this is not trend line this is more like a support resistance so again draw it and connect the major swing points so you can see that initially it would have been from here to here okay then the price breaks out and comes back lower so you can see that whenever the price invalidates a trend line and and in a reverse back right you know that you have to make changes to the trend line that’s the way it is all right there’s a list element of you know subjectivity to it where the price breaks out by a little bit and then reverse back so you redraw the trend line okay so in this case how we draw it you here right notice that I can get this price section in as well okay so it will look something like this then price breaks out retest and hit higher so at this point this trial line here it doesn’t serve its purpose anymore so what I do is that whenever the price breaks out of a trend line every test and you know moves far away I’ll just delete the trend line because the purpose has been met there’s no point cluttering my chats with more trend line status you know of no use so right now how I would draw the trend lines again see I’ll start with this right this is the major swing point and I draw and see if it makes sense but sometimes earlier you saw me saying that you know the major swing point is where it stopped but if it doesn’t make sense I would be glad to start it any other point on a chance where as long as I get the most number of touches in this case the major swing points it still holds up so again I’ll just draw it in this manner okay Anna I’ll shift it down slightly like this okay so again I have one touch two three and four so right now prices retesting this trendline again in fact there’s another secondary trendline not sure if you you notice it this is a secondary trend line okay so it’s over here so this is quite simple I said from the looks of it right generally the market right now is still in an uptrend until it breaks this trend line until it breaks this area of support okay and when do you know the the trend is about to resume itself well the first clue is when the price breaks this secondary trend line I call this a retracement trend line because this is the retracement move against this uptrend so the first clue that you’ll get that the buyers are back in control is when it breaks above this retracement trend line so this additional tip for you okay so this fall for goal and again you can just you know ctrl-c ctrl-v draw this as an area if you wish to okay like this and even even for this can draw this as an area if you wish to okay so but don’t do this over bore I see it’s gonna take this to the extreme if you just you know ctrl-c ctrl-v you’re like way okay so use this with some common sense all right so in this case let me just remove this as well and one last example Aussie dollar so this is how it should be quite fun okay so you can see that over here okay how I would do this right if I if I look at this chart okay again right let’s say imagine right this portion here doesn’t exist so let me just you know go back in time the way I do it would probably be like this or I start off like this okay and then you notice a price breaks out and goes back in so you have to do some adjustment to shift up your trendline slightly above here okay at this point again price breaks up goes back down you could shift it up above here as well and no actually one you probably just leave it like that because you would get another touch and it’s touch over here so let’s say how I do it now is let’s say I draw it like this right okay and I’m even shifting down slightly lower because you see if I were to draw it in this manner I cannot get the touches of you know this year one two and three four and even five I’ll miss all these interesting points what I’ll do is again don’t have to get so fixated by not drawing from the absolute entire loose shifting down the lower and get as many touches as possible so in this case what I’ll do is I’ll ship it down lower bring it up a little bit okay and you can see that right now I got a better fit right now much by shifting the trendline I get you know one touch two three four five six you can see that even here when it retest right it’s it’s more accurate on the retest as well right you’re gonna retest here now retest all right so at this point right I’m not gonna leave this trendline here anymore because it’s clearly invalidated so I would redraw the trendline but I still I want to show you how you know I adjust it along the way as the market price action evolve okay so now the new trend line that I would draw it again now right since this is gone now I’ll just leave this here I mean I’ll just remove this what I’ll do is again I’ll notice that this point here okay there’s a price respecting it okay I’ll just draw this trend line like this okay if I go back in time can I touch any points I think I could I could actually get this point over here so now this would be the new trend line that I would look at right so that’s one touch two three and four okay and I think we could even do this as a trend channel or I know this price you know bouncing off the lows the low so we can just ctrl-c ctrl-v right try to get a trend channel something like if I put two put it something here okay so okay something like that okay so again at this point you now can see where is the area of value to trade from right this is why I said no trendline they are useful to help you identify the long-term trend so-called predict market turning points better time your entries etc so you know that this area over here right is where you look for potential selling opportunities this is where the market tends to find selling pressure and if the if you know the market is near the lows over here of this downward trend line you don’t want to be shorting because there’s a good chance the market can spike up higher like here here here and here it tends to spike up higher right from the near the lows of the trendline so this gives you a good heads up to say hey you wanna be careful man don’t be shorting near the lows of the trend channel on my friend okay so this is the beauty the power of trend lines and I hope you know this gives you an insight to how to grow trend lines and you know get good trading results from it so with that sit right a quick recap boom right number one define your time frame that you’re trading if you’re trading on the one hour time frame just you know can draw your trend lines on the one hour time frame second thing you wanna zoom of your charts at least about 300 bars on a chart setting draw trend lines that connect at least two major swing points fourth thing I tend to adjust it to get as many touches as possible as you know sin earlier and finally one tip I have for you is you know you can copy-paste your trend lines to draw it as a zone so you know that it’s an area on your chart just a line okay so with that said I have come towards the end of this video if you’ve enjoyed it don’t forget the heat that thumbs up button subscribe to my youtube channel the button is all below and feedback command just let me know and I’ll do my best to help so that’s it I wish you good luck and good trading I’ll talk to you soon you


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