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Price Action
Trendline Trading Strategy

How to Study Back to: Trading with Smart Money
Candlestick

Candlestick Analysis  Trendline Trading Strategy in Detail

Price Action Analysis In this article, I am going to discuss the Trendline Trading Strategy in detail. Before
proceeding to this article please read the How to Day Trade with Trend article. As part of

this article, I am going to discuss the following pointers in detail which are related to
Advanced Price
Trendline Trading Strategy.
Action Analysis
 1. The importance of drawing lines over your charts.
Thrust Pullback and 2. TRENDLINE
3. Rules for DRAWING TREND LINES
Measuring Move
4. How to Determine the Significance of a Trendline Trading Strategy
Analysis
5. The trend channel
 6. Use of trendlines Trading Strategy
How to Trade with 7. How to entry based on trend line?
Smart Money
Importance of drawing lines over your charts:

Supply and Demand They tell a story. They showing the angle of advance or angle of decline within a price
Zone Trading trend, alert when a market has reached an overbought or oversold point within a trend,
 showing trading ranges, indicate the point of equilibrium (apex), and help forecast where to
expect support or resistance on corrections.
How to Day Trade
with Trend Never undertake to draw conclusive deductions from trend lines alone taking care to weigh
 all of the factors (three) involved in a complete diagnosis of market action. The three
Multiple Time Frame factors are Price Movement, Volume, and Price Movement-Volume Relationships
Analysis determine when and where trend lines may logically be applied} and when it is inadvisable
to attempt to apply them

Head and Shoulder
What is the Trendline Trading Strategy?
Pattern
 The momentum of an upward movement is reflected in the angular upward climb of the
How to Trade with vertical bars on our charts and the pace of a downward movement by their angular
Support and downward pitch. The eye may not always see the pitch of these angular swings clearly
because of the confusing effect of minor irregularities of the price movement as recorded
Resistance
on charts. Therefore, it is frequently helpful to employ Trend Lines for this purpose. Thus,
 the examination of the accompanying charts will show how the angle of ascent or descent
Advanced of prices may often be visualized more clearly by drawing straight lines through the
Candlestick Analysis successive tops or bottoms of the price path established during the minor, intermediate,
 and major moves
Trendline Trading
Strategy
 
WRB Trading
Strategy

Day Trading Strategies


VWAP Trading
Strategy

Gap Trading
Strategy 

Intraday Open High
Open Low Trading
Strategy

PIN BAR Trading
Strategy

Trading with
Sideways Price
Action Area

Pullback Trading A support or demand Line is that line that identifies the angle of the advance of a bull
Strategy swing by passing through two successive points of support. Example:- Lines A-C, D-1 in
 above IMAGE 1

Intraday Breakout
A resistance or Supply Line is that line that identifies the angle of the decline of a bear
Trading Strategy swing by passing through two successive points of resistance (top of rallies). Example:-
Line I-K, and I-6 in above image 2.
Risk Management
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 An Oversold Position Line is that line that is drawn parallel to a supply or resistance line
and passes through the first point of support (reaction low) which intervenes between two
Stock Selection for
successive rally tops in a downtrend. Example:- Line J-L, Note that J is the first point of
Intraday Trading
support intervening between the two successive tops, I and K. IN IMAGE 2

Intraday Trading Course

An Overbought Position Line is that line that is drawn parallel to a support line and passes
2020
through the first point of resistance (rally top) intervening between two successive points
 of support in an uptrend. Example: Lines B-E, in above image 1
Intraday Trading
Course Rules for Drawing Trendline Trading Strategy
  RULES
Multiple Timeframe
1. DRAW a new trend line by connecting the stat of the trend with a valid swing point.
Analysis for Intraday
2. Adjust the trend line as price action unfold
Trading 
 DRAW a new trendline by connecting the stat of the trend with a valid
VWAP Trading swing point

This means that we cannot draw a new trendline without a valid swing. First of all, there
Opening Range
must be evidence of a trend. This means that for an up trendline to be drawn there must be
Trading Strategy at least two reaction lows with the second low higher than the first

Opening Range
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Analysis
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Volume Analysis in
Trading
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Volume Price Action
HOW TO FIND VALID SWING HIGH AND SWING LOW? Click here
Analysis

Volume Spread
Analysis in Trading
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Candlestick Pattern
Analysis
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Finding Entry
Opportunity using
Volume Spread
Analysis
ADJUSTING New trendlines

Spring and Upthrust For instance, in the case of an advance, the angle of ascent may be leisurely for a time and
Trading Strategy then become pitched more sharply upward as the original force of demand is renewed by
 fresh buying from the sponsors of the move and the public, and perhaps by expanding
enthusiasm of bullishly inclined traders and investors. Under these conditions, we have to
VSA Trading Strategy
relocate our trend lines to conform to the newly established stride
Option Chain Analysis
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Option Chain
Analysis

Indicator 
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RSI Trading Strategy

BTST 
 
BTST Trading
Strategy

TECHNICAL ANALYSIS
MASTERCLASS

Technical Analysis

Market Structure 

Understanding
Market Structure
through Swing  If a steep trend line is broken, a slower trend line might have to be drawn

Supply and Demand
Trading (Part – 1)

Supply and Demand
Trading (Part – 2) 

Chart Patterns 

Top 7 Chart Patterns
in Trading Every
Trader Needs to
Know
 Trendline analysis on a chart
How to Trade Bull
Flag and Bear Flag
Pattern

How to Become a
Successful Trader

How to Become a
Successful Trader

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Books

It will be seen that after the reaction to (B), we are able to distinguish two well-defined rally
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tops, the first at (A) and the second at (C).
Trading Books
 Accordingly, if we draw a straight line through the extreme tops of these two rallies we find
Most Recommended that the extension of this supply line to the right, across the page, helps to define the
Intraday Trading approximate limits of subsequent rallies. If, however, it is able to rise through the supply
Books line with some degree of strength by either with increasing volume, or by a material gain in
price, or both. Finally price swing E-F successful break the supply line, as both candle and
volume increases
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Price Action Analysis The upswing from G enables us to establish the trend support line E-G which represents
Books the angle, or rate of acceleration, of the first phase of the bull campaign in this stock.
Extending this line to the right, we find that after the rise is temporarily accelerated by a
sharp run-up from G, then price recedes toward this line of support in what we conclude is
a normal corrective reaction. We reason that if it recedes further, we may expect the price
to hold on or around this line of support (H). It does hold, for on the quick further rally from
G POINT, marked by closing at the high, as the price almost touches our established trend
line. Thus our trend line has given us a helpful hint, in advance, as to the point at which we
might reasonably look for new demand (support) and the probable place where this
particular reaction should end.

After the mark-up from H POINT, we must readjust our trend support line because of the
increasing momentum of the rise. PONIT (1) brings a new phase of the advance. This new
line, of course, runs from 1-2, price getting support from the support line.

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How to Determine the Significance of a Trendline Trading Strategy

1. The number of times the trendline has been touched or approached. The larger the
number, the greater the significance. A trendline that has been successfully tested
five times is obviously a more significant trendline than one that has only been
touched three times
2. Time factor, a trendline that has been in effect for nine months is of more importance
than one that has been in effect for nine weeks or nine days.
3. Angel of ascent and descent, a very sharp trend is difficult to maintain and it’s liable
to be broken, the steep trend is not more important as that of a more gradual one a
large angle on a lower trendline in an uptrend means that the lows are rising
significantly fast and that the momentum is high.

THE TREND CHANNEL

Occasionally, the momentum produced by the forces of demand and supply will become
so plainly marked as to develop a well-defined zone of activity; that is, the alternating
buying and selling waves form a price path or channel whose upper and lower limits are
easily identified by a series of tops and bottoms confined within parallel, or nearly parallel,
lines.
The drawing of the channel line is very simple. In an uptrend, first, draw the support or
demand line along with the lows (A-C). Then draw a line from the first prominent peak
(point B), which is parallel to the support or demand trend line. Both lines move up to the
right, forming a channel If the next rally reaches and backs off from the channel line (at
point D), then a channel may exist. If prices drop back to the original trendline (at point E),
then a channel probably does exist. The same holds true for a downtrend, but of course in
the opposite direction

In the uptrend supply line act as overbought, the price will be reverse from the supply line.
Support line act as oversold

Use of Trendline in Trading:

Use of trend lines is frequently helpful in judging the points at which you may expect the
price:-

1. To be supported on reactions;
2. To meet resistance on rallies; and
3. Overbought and oversold condition sowing in channel
4. To approach a critical position in its travel from one level to another. Trend line l also
help you to foresee the possibilities of an impending change of trend before it
actually takes place

The violation of a trend line often (but by no means always) may signify that the force of
demand or supply which was formerly in effect is now becoming exhausted. This may
either mean that the price movement is changing its rate of progress, or it may mean that
the trend is definitely in danger of being reversed.
Trendline Trading Strategy

It is bad practice to take entry on a stock simply because it has penetrated an established.
Trendline or broken out of an extended congestion area. The significant thing is HOW the
line is broken; the conditions under which the change of stride occurs.

The quality of the buying or the selling at and around the point of penetration determines
whether the violation of an established trendline may be regarded as evidence of a further
price movement in the direction of the breakthrough, or whether it means the only
temporary change of false breakout. For breakout, the price needs to close above or
below the trendline

An opposite trade to be taken on the retest of the trendline

In the next article, I am going to discuss the WRB Trading Strategy in detail. Here, in this
article, I try to explain Trendline Trading Strategy in detail. I hope you enjoy this Trendline
Trading Strategy article. Please join my Telegram Channel  to learn more and clear your
doubts. https://t.me/tradingwithsmartmoney.