How to Determine The Strength of Trend Line

• Knowing the strength of the trend line that you have drawn can be beneficial to your trading. If the trend line that you have drawn is strong, there is a high chance that the market will respect it and get repelled by it when it touches the line.

Drawing trend lines that are insignificance is equivalent to not drawing any trend line. You will find that the price usually does not respect these levels and therefore it cannot be used to help you in your trade.

Below is how you can determine the strength of the trend line

Number of times the trend line has been touched determine The strength of the trend line

  The more time the trend line has been tested by the price, the stronger is the line and the more likely it will be able to hold!

The strong trend lines are usually used as exit or entry position. Most traders enter a trade when the price successfully breaks through the strong trend line  and exit their position when the price hits the strong trend line.

In both of the examples, you can see the price breaking out of the trend line making you think that the breakout has occurred. After a few candles later, the price reverses and stops you out.

     

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