Trend Line Breaks Forex System

Trend line break happens when the price reaches a trend line, breaks through this line and continues moving in the determined direction. The occurrence of trend line breaks is possible thanks to showing the most probable point of future support or resistance on the trend line, and this support and resistance is going to weaken at some time.

Using Trend Line Breaks For Trading

You may call trend line breaks as “counter trend trades”

The reason is that trend line breaks are based on continuation of price movement in its new direction against the previous trend. If we have an upward trend and trend line, there would be a short trade in case of trend line break; it means that selling would occur at a price near the trend line, and after that buying would occur at a price below the trend line. If we have a downward trend and trend line, there would be a long trade in case of trend line break; it means that buying would occur at a price near the trend line, and after that selling would occur at a price above the trend line.

forex system trend line

As a rule, use of trend line breaks alone is counterproductive. Generally, traders combine trend line breaks with other information, for example, volume or price movement information. For instance, a trader might create a complete trend line trading system from the combination of strong volume in the correct direction and a trend line break.

The most likely location of the trend line breakdown is the intersections with the resistance and support lines . When prices approach the line of resistance or support we can estimate the value of Hurst exponent and Hurst exponent divergence. This will help you to find enter point with high probability and accuracy.

forex system trend line

Useful Metatrader 4 Indicators: MetaTrader Indicator Support Resistance Levels
MetaTrader Indicator Hurst Divergence

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