Trendline Trading Example

Trend trading is a powerful trading strategy of entry for Forex traders finding to get benefit of the long term movement of a Forex pair. let's take a look an example, GBPNZD pair has been developing strongest trends in the Forex market. The GBPNZD dropped 1774 pips , and then traded 215 pips bullish. As the GBPNZD moves against the main trend , Forex traders will find for price levels to entry a new short positions. We can do this is with looking resistance level in a bearish trend , using Forex trend line. In this following chart is GBPNZD chart. To help in the trading analysis , we have connected a series of swing highs to make a trendline. Once the trend line is made, Forex traders can find to open new short position market price trades up to this resistance level, so long that a candlestick body close above the trend line. A breakout of this trendline would invalidate the analysis and Forex traders should be better to find for another chance elsewhere.

Trendline can also be traded in conjuncture with another patterns of resistance and support. In the following chart we also included a Fibonacci retracement in conjunction with our trend line trading analysis. Forex traders can find to open entry position to short were these two patterns of resistance meet. This way using an entry as opposed to a Forex market order, Forex traders don't have to actively watch their trading charts in anticipation to making a new position.

I suggest is to short the GBPNZD close where our fibonacci and trendline resistance converge. Stop loss can be plotted above the resistance level and profit target should look at least 1:2 Risk/Reward ratio.