Fashion lines are lines drawn on historical price levels that predict the general direction in which the tick is headed and provide an indication of support/resistance.
Drawing fashion lines is a very subjective thing. The best test of whether a trend line is valid is usually when it is a good line. In a trend, a trend line should connect relative low points on the chart. A line connecting the lows of a longer-term rally can be a support line that can provide a floor for partial retracements. The down trend line connecting the relative highs of the chart similarly acts as resistance to shorter moves back higher.
Any two relative highs or lows are on the same line, so it is possible to draw a tentative trend line between any two points. Traders can use tentative trend lines as an indication of where support or resistance is, but until a tentative line remains as support or resistance, it cannot be confirmed as valid.
Of course, the more times a trend line holds, the stronger it will be in the future. If a line connects to 4 or 5 relative lows, then the chances of the next pullback bouncing off the line are high.
Every experienced trader knows that trend lines should be given special attention in Forex trading. But plotting trend lines takes time, and there can be a lot of it on charts… Do you want to know how to automate this process quickly and easily? Then read on.
There is a solution — smart and reliable trend line indicator, the Automatic Trendline. All you have to do is attach the indicator to the chart, and it will draw all possible trend lines for you. You need to appreciate the result and apply it to your trading strategy.
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