The Importance of Trend Line In Binary Trading

One of the most important tool in trading is the trend line. The trend line is an invisible line of support and resistance that you must plot in order to identify it.

Knowing the position of strong level of trend line can be a plus point in trading. Sometime if you do not know the position of those strong trend line and you enter a trade against the trend line, you do not even know what hits you when the option expires as a losing trade.

Knowing that there is a strong resistance trend line above the price and your strategy tells you to enter a HIGH option, you should consider whether you should enter the trade or not.

Alternatively, you can enter a trade with a lower trade size for trades that are against the trend line.

So let me share with you how to identify strong trend line

  • First of all, you will need to identify swing highs and swing lows as these are the points where you are going to connect to draw a trend line.


Swing high

  • Next you will try to connect various swing highs and various swing lows together to form your trend line.

trend line 1

trend line 2

  • The trend line you are going to keep are the ones which have more than 3 connecting points.

Once you have identified all the strong trend line, you can then wait for the price to hit those levels.

All you need to wait for is for your strategy to inform you to enter a trade that is in the direction of the repulsion of the trend line.

I am not asking you guys to enter trade whenever the price hits the trend line as this will wipe your account out in no time.

The trend line serves as an additional tool for the strategy you are using as it will improve your overall performance.

For those of you who are interested to see how I trade, you can take a look at my FREE Live Trading Room where I will allow you to watch over my shoulder to see how I trade everyday and how I setup my chart everyday.

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