What Is a Trendline?
A Trendline is a straight line that connects multiple price points on your chart to show which way the market is moving.
There are two types:
1. Uptrend Line (market going up)
2. Downtrend Line (market going down)
These lines help you avoid trading against the market, which is a common mistake for new traders.
Why Trendlines Matters?
1. They show you the Current Trend
2. Help you decide when to enter and exit a trade
3. Combine well with Support and Resistance
4. Keep your trading plan simple and clean
How to Draw Trendlines in MetaTrader 5?
1. Open your MetaTrader 5 app
2. Go to Charts
3. Zoom out to get a wider view of price movement
4. Tap the “Object” icon (looks like a square)
5. Choose “Trendline”
Part 2 Draw:
1. For Uptrend, connect two or more low points going higher
2. For Downtrend, connect two or more high points going lower
Make sure the line touches at least 2 points, the more, the better!
How to Use Trendlines for Entry
In an Uptrend:
1. Wait for price to bounce off the trendline
2. Look for Buying opportunities
3. You can combine this with support levels for extra confirmation.
In a Downtrend:
1. Wait for price to touch and reject the trendline
2. Look for Selling opportunities
3. Combine with resistance for higher accuracy.
For Example, you’re watching the USD/JPY pair. You draw an uptrend line connecting two lows which can be 135.00 and 136.50. If price touches the trendline again at 137.00 and starts rising, that means a strong buy Signal. You can then enter the trade and set your stop-loss below the trendline, smart and simple.
Warning:
Trendlines aren’t perfect. Don’t rely on trendlines alone, always check with other tools like Support/Resistance or Candlestick Patterns. The more touches a trendline has, the stronger it is.