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    Lesson 1 - Trendline & Structure Levels

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    rontechtips
    The document discusses two main components for identifying trends: structure levels and trendlines. Structure levels are price points where the market sees significant reaction, acting as support or resistance. Trendlines connect lows or highs to show the overall direction of prices. When combined, structure levels and trendlines provide clear entry opportunities that are in line with the prevailing trend. The document provides examples and guidelines for drawing each individually on a chart, then illustrates their power when used together.

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    Lesson 1 - Trendline & Structure Levels

    Uploaded by

    rontechtips
    118 views14 pages
    The document discusses two main components for identifying trends: structure levels and trendlines. Structure levels are price points where the market sees significant reaction, acting as support or resistance. Trendlines connect lows or highs to show the overall direction of prices. When combined, structure levels and trendlines provide clear entry opportunities that are in line with the prevailing trend. The document provides examples and guidelines for drawing each individually on a chart, then illustrates their power when used together.

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    The document discusses two main components for identifying trends: structure levels and trendlines. Structure levels are price points where the market sees significant reaction, acting as support or resistance. Trendlines connect lows or highs to show the overall direction of prices. When combined, structure levels and trendlines provide clear entry opportunities that are in line with the prevailing trend. The document provides examples and guidelines for drawing each individually on a chart, then illustrates their power when used together.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    118 views14 pages

    Lesson 1 - Trendline & Structure Levels

    Uploaded by

    rontechtips
    The document discusses two main components for identifying trends: structure levels and trendlines. Structure levels are price points where the market sees significant reaction, acting as support or resistance. Trendlines connect lows or highs to show the overall direction of prices. When combined, structure levels and trendlines provide clear entry opportunities that are in line with the prevailing trend. The document provides examples and guidelines for drawing each individually on a chart, then illustrates their power when used together.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 14

    TRENDLINES

    &
    STRUCTURES
    2 Main Components To Identify A Trend
    Structure Levels + Trendline = A Solid Tradeable Trend

    Structure levels are price Trendlines are a diagonal line Once combined, you can
    points where there's a which can be drawn by easily identify a trend and
    significant reaction - either connecting the lows or find entry opportunities
    price finds support or price connecting the highs - acts a in line with the trend
    rejects form of support/resistance
    Drawing Structure Levels
    Step 1 Step 2 Step 3

    Find a chart where price Mark out where price reacts Draw a rectangle box
    looks to be trending in one significantly - Where price where you have marked
    direction reverses heavily in the out where price has
    opposite direction reacted significantly.
    You now have structure
    levels.
    Structure Levels Key Points
    Where price reverses, mark
    that level and extend a
    rectangle box right.

    Previous resistance can act


    as support.

    Structure levels should be


    used as a guide. Price can
    spike below or hover above
    level.

    Structure levels can be


    drawn on all timeframes.
    Higher Timeframe more
    reliable.
    Structure Level Example
    1

    STEP 1

    Find a chart where price


    looks to be trending in one
    direction.

    We chose EURJPY Daily


    timeframe in this example.
    We can see that price
    keeps pushing higher and
    higher = uptrend.
    Structure Level Example
    2

    STEP 2

    Mark out where price


    reacts significantly -
    Where price reverses
    heavily in the opposite
    direction

    Whenever we saw price


    move in the opposite
    direction, we marked it out
    with a yellow box.
    Structure Level Example
    3

    STEP 3

    Draw a rectangle box where


    you have marked out where
    price has reacted
    significantly.

    We can see that price


    reacted to the structure
    levels more than once.

    We can use this to forecast


    where price may react next!
    Drawing Trendlines
    Step 1 Step 2 Step 3

    Find a chart where price Connect the first 2 lows with Extend the line right.
    looks to be trending in one a line.
    direction You now have a trendline
    where price may find
    support.
    Trendline Key Points
    Find the first 2 lows and
    connect a line. Naturally it
    should be a diagonal line

    Extend the line right and


    you'll find that future price
    action reacts to that
    trendline.

    Price can sometimes spike


    through trendlines.

    We use candle wicks to draw


    trendlines. Not candle
    bodies.
    Trendline Example
    1

    STEP 1

    Find a chart where price


    looks to be trending in one
    direction.

    We chose EURJPY Daily


    timeframe in this example.
    We can see that price
    reversed from the bottom
    and is making its way up.
    Trendline Example
    2

    STEP 2

    Connect the first 2 lows


    with a line.

    Once we have the trendline


    connecting the two lows,
    we can extend it and
    watch for future price
    action near the trendline
    and trade accordingly.
    Trendline Example
    3

    STEP 3

    Extend the line right.

    As you can see, price


    reacted to the trendline a
    few more times before
    breaking down.

    Trendline strategies can


    be incredibly effective if
    used correctly.
    Stacking Up Confluences
    On its own, structure levels and
    trendlines can be traded. However,
    that's only one confluence.

    Where you excel is when you


    combine both of these together to
    get an even higher chance of a
    trade set up playing out.

    See next page to see an example of


    a chart looks with both structure
    levels and trendlines combined.
    Trendlines & Structure Levels
    First Entry: Risk entry based on just
    structure level.

    Second Entry: Price above


    trendline (therefore, price is in an
    uptrend). Entry based on the
    rejection of structure level which
    was above newly formed trendline.

    Third Entry: Price approached


    structure level AND trendline. Entry
    on bounce of these 2 confluences.

    STOPLOSS: BELOW Structure &


    Trendline

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