The Only Trend Line Trading Strategy You'll Ever Need

I don't use trend lines in the usual way that other people use them, but I still think they are brilliant and can build a very solid foundation to your strategy. So, in this video, I'm going to show you how trend lines work, how I personally use them inside of a three-step strategy that you can start using today to ultimately help you win as a trader. A trend line is an area in a market where the market has retested multiple times. So, it's basically a ascending or descending price level that is supposed to determine the trend. This is an ascending trend line because the market's going up. The idea here is that the market creates one tap, two tap, and then any tap after that, we expect the trend line to continue trading higher. In the case of a descending trend line, it is just the opposite. The trend line is drawn above price. And after two taps of a trend line, traders will then look towards the following taps for their trading opportunities. There are two ways that people traditionally trade trend lines. There is the retest and the break retest. So a retest is simply after the second tap. Any further taps of the trend line, traders will look to buy. They expect the market to react from the trend line again and continue moving to the upside in the case of a bullish trend line or to the downside in the case of a bearish trend line. Now in a break retest this is where the market fails to hold upon its retest. So in this example just here instead of retesting there is a break which looks like this. This break is then in theory followed by a retest of the trend line and sellers will step in inside of this area to bring the market down expecting now that the trend line has broken the market structure has broken. Now there is a big problem with these two ways of trading. Let me explain. So, here is a trend line in the wild. We have the first tap and the second tap. After that, the standard way to trade trend lines is to sell the retest because we understand this is a descending trend line. It's moving down. The idea is to continue selling expecting this trend line to react. And the other way to trade it is if the trend line breaks, traders will then look to buy the retest because they see this trend line break as a change in the market trend.