This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.
Trend lines are sloping support and resistance lines. They are commonly used to judge entry and exit points in trading. A trend line is formed when you can draw a diagonal line between two or more price pivot (reversal) points. They are commonly used to judge entry and exit investment timing when trading.
A trend line is a bounding line for the price movement of a market. A support trend line is formed when a market price decreases and then rebounds at a pivot point that aligns with at least two previous support pivot points or if a channel can be formed by creating a parallel resistance trend line. Similarly a resistance trend line is formed when the market price increases and then rebounds at a pivot point that aligns with at least two previous resistance pivot points or a parallel support trend line.
The following chart provides an example of a well establish resistance trend line with multiple points of alignment:
As you can see from this example the price has been in a well defined upward trend, with the resistance line being formed while the price consolidates. A common trading strategy in this example is to open a long position (buy) when the price breaks through the consolidation resistance level. Using timetotrade, alerts can be set up to notify, or execute trades, you when the price breaks through a support or resistance trend line.
When a new trend is forming you may wish to trade it before there are three or more points of alignment. To help establish if two price pivot points are potentially forming a trend line, draw a line that connects the two pivot points that you have identified, and then create a parallel line and look for evidence of a price channel:
In this example a possible trading strategy is to buy when the price pulls back to test the lower red support trend line and then sell when it tests the upper blue resistance trend line.
When the price breaks through a support trendline after a prolonged upward bullish trend, it can signal a period of profit taking, therefore it is common for traders to close long positions if support is broken as illustrated:
In a bearish downward trend, should the price break through resistance then traders typically close short positions.
When establishing trend lines it is important to choose a chart based on a price interval period that aligns with your trading strategy. Short term traders tend to use charts based on interval periods, such as 1 minute (i.e. the price of the market is plotted on the chart every 1 minute), with longer term traders using price charts based on hourly, daily, weekly and monthly interval periods.
Trend lines are typically used with price charts, however they can also be used with a range of technical analysis charts such as MACD and RSI. Trend lines can be used to identify positive and negative trending charts, whereby a positive trending chart forms an up sloping line when the support and the resistance pivots points are aligned, and a negative trending chart forms a down sloping line when the support and resistance pivot points are aligned.
If the market price is oscillating between support and resistance trend lines, the market is described as trading in a "channel". There can be multiple parallel support and resistance trend lines within a channel as illustrated:
A common Trend Line trading strategy in bullish markets is to "buy to open at support" and "sell to close at resistance" i.e. buy when price bounces of the support line and sell when the price bounces off the resistance. In a bearish downward trending market, "sell to open at resistance" and then "buy to close at support"
Another strategy used with trend lines is to trade ‘break-outs’ as discussed above. If the market breaks through its support or resistance lines this can signify a change in trend. For example, if the market is in a downward trend and breaks through a resistance trend line, this is considered a bullish move as in such instances the market can increase until a new line of resistance is reached or established. On the other hand, if the market is in an overall upward trend but then price falls below its support trend line, this is considered a bearish move.
As with the support and resistance levels, a support trend line can become a resistance trend line if the price of the market falls below the support line. Similarly a resistance trend line can become a support trend line if the price of the market rises above the resistance.
Trading support and resistance trend lines and levels is not an exact science. Prices might not quite hit support and resistance levels before reversing and break-outs can be very short lived, providing false signals. For these reasons many traders will use support and resistance ‘zones’ allowing for a margin of error either side of the support / resistance levels.
For help on how to use the timetotrade trend line chart drawing tools click here.
To learn more about the timetotrade charts and alerts:
- Free Stock & Forex Charts
- Draw Trend Lines
- Create Trading Alert
- Multi-Condition Alerts
- Technical Analysis Alerts
Want to create a custom indicator, alert or trading strategy, but don't know how? No problem - post a question on the forum or contact us. Go to the Ask A Question section on the timetotrade forum to see the type of alerts that timetotrade users are creating:
- Pausing Alerts when Price Breaks out of a Trend
- Trend Line Alert Management
- EURUSD Trend Line Trading Strategy
- USDJPY Trend Line Trading Strategy
- AUDUSD Trend Line Trading Strategy
- NZDUSD Trend Line Trading Strategy
- GBPUSD Trend Line Trading Strategy
It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.
You need never miss a trading opportunity again!
Do you want to:
- buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
- or sell when a support trend line is broken?
- or back-test your strategy going back as far as 30 years?
TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.
Open a FREE TimeToTrade account today to:
- Trade UK, US and European Shares - apply now
- Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
- Email and SMS Trigger Trading™ Alerts - learn more
- Trade Off The Chart - learn more
- Back Test Trading Strategies with up to 30 years of historical data - learn more
- Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
- Real time Forex, UK, European and US stock market data - learn more
- 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
- All the tools you need to set up and run a successful investment club - learn more
- Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
- Create Trading Competitions for you and your friends - learn more
- Apply for a trading account today to get the Live Account Features - apply now
Apply now to try our superb platform and get your trading advantage.
The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.
All services are provided by TigerWit Limited. TimeToTrade is a trading name of TigerWit Limited (a company registered in England and Wales under number 9479466). Our Registered address is TigerWit, 7th Floor, Augustine House, 6A Austin Friars, London, EC2N 2HA, England. TigerWit Limited is authorised and regulated by the Financial Conduct Authority number 679941.
The trading services offered by TigerWit Limited are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading spread bets with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. All clients should be aware that trading involves risk.