If you use the MetaTrader 4 platform then you’re going to want to want to learn more about trendlines and how to use them. This Forex Essentials blog post explores some tips on how to use MT4 Forex trendlines and most importantly how to get the most out of them.
What are MT4 Forex Trendlines?
Trendlines are drawn on your forex trading charts primarily to help you identify how price moves between horizontal areas of support and resistance.
Think of trendlines in their most basic form like this: If price is in a bullish trend, then you’d draw an uptrend line along the bottoms of each higher low. If on the other hand, price is in a bearish trend, then you’d draw a down trend line alone the tops of each lower high.
A bullish trend line slopes upward and is used as market support. A bearish trend line slopes downward and is used as market resistance. There really isn’t much more to trend lines than that.
Normally MT4 forex trendlines are drawn from the highest or lowest point of the wick, but as they’re a slightly subjective tool, it is the personal preference of some traders to use candle bodies as their connection points.
How do I draw MT4 Forex Trendlines?
Drawing MT4 forex tendlines on the Vantage FX MT4 platform is easy. Simply click on the trendline icon, then click and draw the trendline from each high or low point on your chart. To finish drawing the trendline, just release your finger of the mouse.
If you want to make changes to your trendline, simply double click on the line to highlight it, right click on the line and select trendline properties. Click and drag either end of the trendline to rotate and click and drag the centre box of the MT4 forex trendline to move the trendline to a different price level.
If you want to draw a parallel line, hold the keyboard’s Ctrl button and drag a new line out from within the existing trendline and if you want to simply delete it, then right click on the selected line and click delete.
Getting the most out of MT4 Forex Trendlines
Here are a few final tips for you to consider when drawing MT4 forex trendlines. By taking this advice on board, hopefully you can really get the most out of using trendlines properly.
First of all, remember that trendlines are a subjective tool. They are more of an art than a science and should therefore be used as a zone rather than a hard level.
It takes at least 2 touches to draw a valid trend line, but the 3rd touch is a confirmation and is the one you can trade around.
Remember the steeper the MT4 forex trendline that you draw, the less reliable it is going to be and the more likely it is going to break. You can see this as a positive or a negative depending on if you trade bounces or breakouts.
To finish up, don’t force trend lines to fit the market. The market has to dictate where they should be placed and it has to be obvious.
If you struggle to see it, then everybody else is struggling to see it too. Keep it simple!
Source: Vantage FX Blog