We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.02%, while traders in US 500 are at opposite extremes with 75.83%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UCu5dfPDHl
  • Heads Up:🇺🇸 USD MBA Mortgage Applications (DEC 6) due at 12:00 GMT (15min), Actual: N/A Expected: N/A Previous: -9.2% https://www.dailyfx.com/economic-calendar#2019-12-11
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Gold: 0.19% Silver: 0.02% Oil - US Crude: -0.59% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/UCIceROqmN
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.44% 🇳🇿NZD: 0.07% 🇯🇵JPY: 0.05% 🇨🇦CAD: -0.03% 🇨🇭CHF: -0.07% 🇪🇺EUR: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XqqrrlWAgH
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.20% US 500: 0.05% Wall Street: -0.00% France 40: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/32XnoceiRU
  • GBP/USD Faces a Risk of Reversal -British Pound to USD Price Forecast More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2019/12/11/GBPUSD-Faces-a-Risk-of-Reversal-British-Pound-to-USD-Price-Forecast-MK.html?CHID=9&QPID=917714 https://t.co/LsgLV9vBZ1
  • Final YouGov MRP Poll update $GBP https://t.co/vf9SsVARYo
  • LIVE IN 30 MIN: Join Currency Strategist @PaulRobinsonFX as he discusses important technical developments relevant to short to intermediate-term commodity and equity index traders. Register here: https://www.dailyfx.com/webinars/816147795?CHID=9&QPID=917720
  • USD/JPY Outlook Hints at Drop, Nikkei 225 May Join It - https://www.dailyfx.com/forex/technical/article/special_report/2019/12/11/USDJPY-Outlook-Hints-at-Drop-Nikkei-225-May-Join-It.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #USDJPY #technicalanalysis https://t.co/nFYCnCoIeX
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/10:30 AM GMT to gain insight on indices and commodities for the active trader. Register here: https://t.co/gghsFsZYlx https://t.co/ZKIWbxrDbl
Using a Valid Trendline

Using a Valid Trendline

2011-10-31 21:35:00
Richard Krivo, Trading Instructor
Share:

When executing trades based on a trendline, it is important that the trendline is a valid one. This validation would occur when price has touched and respected the trendline a minimum of three times.

Take a look at the current 4 hour chart of the AUDCAD below for an example…

Using_a_Valid_Trendline_body_3rd_touch.png, Using a Valid Trendline

The first point on any chart is simply a random point on that chart. When a second point appears, no matter where it appears on the chart, it can be connected to the first by a straight line but that really tells us nothing. When the third point occurs and it can be connected by the same straight line that connects points 1 and 2, now we have something from which we can trade.

Once the third touch occurs, provided that the candle does not close above the trendline in a downtrend or below the trendline in an uptrend (in other words price respects the trendline), we would take a position at the open of the next candle. Our stop would go below the trendline in an uptrend or above the trendline in a downtrend.

Looking at the above chart, a trader could take a buy (long) position at the open of Entry Candle A with a stop (red line) just below the trendline. A trader could also take a buy position at the open of Entry Candle B with a stop just below the trendline. Going forward, if the current open candle, the last one on the right of the chart, closes above the trendline, a trader could take a long position at the open of the next candle (not yet on the chart) with a stop just below the trendline.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.