You have already encountered line graphs for as long as you can think of. It is a very effective graph when it comes to understanding if the flow is going up or down. When it comes to Forex trading, trend lines are working the same way, which is to tell whether the value of a particular market is rising or falling.
The line being drawn from Point A to Point B depends on the calculation and automation of particular Java runtime programs. Even if it would just number, the trend can still be understandable.
Reading a Forex Trend Line
Each point in the graph has stories and indications to tell. It depends on you if you would follow the graphs quickly or you will stay and act on that point in the market where your favor is assured. When the markets move upward and you connect the lowest swing points, you will create a trend line that respects the gradual rise of the price.
When the market goes down and it was consistent, connecting the upper swing points will also create a trend line. As these points are connected, only then will a particular behavior be established, which would make you decide whether to buy or sell on a particular market trade.
Trading Range in the Trend Line
When you draw the lower swing points together, you create a trend line that shows support levels and upper swing points connected indicates resistance levels. As both lines are illustrated, you have created a trading range wherein you can decide on how much to buy or sell, or when to do both, depending on the flow of the market.
New Trends in the Trend Line
When you draw support lines and resistance lines and notice that they intersect, it only means that there would be a breakout or change in the trend, that would occur. As these lines cross, it indicates that new levels of support and resistance will also be created. These lines and points may be simple to understand, but playing close attention to it will assure Forex trading success.