eToro – Forex Trading Forum

[Tropezienne]

The trendline is a basic forex tool and eToro‘s upgrade has encoouraged me to learn how to use one. I have been playing around with the trendline on the one hour charts today.

I saw patterns emerging that proved very useful. First of all I drew a trendline along the low points - ie: a support line for the prices above it. Then, on the same chart, I drew another trend line along the high points - ie: a price resistance line.

Then I opened a position to explore what the chart was telling me (this was on my demo account) and I discovered that when these two lines were more or less parallel I had a profitable position - if lines were going up I bought and if going down I sold.

Where the support and resistance lines diverged I was in a losing position.

So, I tested this theory with different currency pairs having derived the following rules from my observations :

DO NOT to open a position when divergent trend lines are drawn.
DO OPEN positions with parallel trend lines.
CLOSE positions where parallel trend lines began to diverge.

I repositioned the lines regularly - especially after a big surge or dip.

Because I was being experimental I did lose some pips - but on the whole I have learned how to identify positions in which I can gain pips.

Have a go - see if it works for you - let us know how you get on.

Julie the Newbie

http://who-gives-a-forex.blogspot.com

[Tropezienne]

Well, I continued experimenting with the trend line feature and it paid off for me consistently. As long as I stick strictly to the rules - find a parallel pair of trend lines - one line to be a suporting line and the other to be a resistance marker. If the trend lines are going up - buy, if they are going down - sell; as soon as they begin to either diverge or converge - close the position.

It is a scalping system - and earns small amount of pips at a time. But it works.

I find it is a great way to pass an odd half-hour or so. At just about any time of the 24 hours forex trading day a parallel pair of trend lines can be found and the position scalped.

It is, no doubt, a very naive system and I’m sure (I hope) that one day I’ll come up with something more sophisticated and more profitable !

Julie the Newbie -1

http://who-gives-a-forex.blogspot.com/

[forester]

At the top of the new features list is the extensive changes eToro has implemented to the platform's charting tools. All of the eToro charts, including the Forex Match arena in which traders pit currencies against each other in a tug of war and the live currency charts in the eToro lobby, now give traders the option of viewing candlestick charts, support and resistance levels, trend lines and trend channels. These charting features are sure to provide eToro's traders with the extra information they need for making trading decisions.

[forester]

hey tropozienne ...............thanx 4 the info

[MannieNL]

If I understand your way correctly, you're basically looking for the most stable and therefore most predictable trends. Of course it can always change dramatically and then i think your system will fail. For short positions only this might work out the more and less.

Don't you think?

[Tropezienne]

If I understand your way correctly, you're basically looking for the most stable and therefore most predictable trends. Of course it can always change dramatically and then i think your system will fail. For short positions only this might work out the more and less.

I am very new to forex but one thing that has become evident to me is that it is important to develop one’s own style for trading based on proven forex basics. Hence my experimentation (on my demo account).

Hopefully one day I will have developed enough as a trader to break away from the stable and predictable - but first I must establish strong trading foundations.

Julie the Newbie -1

http://who-gives-a-forex.blogspot.com/

[Tropezienne]

I’m still using to positive effect the trend line feature that arrived in the July upgrade.

Trend lines are made by connecting 3 or more points along the same line. They either connect the tops of the highs together or the bottoms of the lows. Trend lines work because everyone sees them and know that the next time the price hits that level, a reversal should happen, so they can decide whether to rush to buy or sell.

I find that if I join the high points together to create the resistance trend line and the line is pointing down - then that currency pair is in a downtrend (simple really) and I would probably sell. The opposite is true. If I connect the lows together, and the support trend line produced is rising - then it is an uptrend and I might buy.

Generally, a trend line can be drawn from as few as two support/resistance points. However, the more support/resistance levels that are touching the trend line, the more stable the trend is.

How do you use your trend line ?

Julie

http://who-gives-a-forex.blogspot.com/