Trendline is considered the first technical indicator in the world. It is the most basic and simplest tool in all graph analysis methods.
What is Trendline?
The trend line (also known as the trendline) is created from the price movement. A trend is called an upward trend when the price keeps going up, creating both bottoms and tops which are higher than the previous ones.
Conversely, when the price continues to fall, creating both tops and bottom which are lower than the previous ones. This is called a downward trend. If the price goes sideways, the market is in a sideways trend.
How to create trendlines at Olymp Trade
At the indicator tab on the Olymp Trade interface, you pull down near the bottom then select the trend line. This is a pink line where you can freely draw on the Olymp Trade trading interface.
There are 3 main types of trends in the Olymp Trade price chart
When the price goes up and forms bottoms which are higher than the previous ones, you just need to draw a line created from these two bottoms upwards. So you will have a trendline moving up.
In contrast to Uptrend, to draw the Downtrend line you just need to connect the two downward tops together. Then just extend this line and there will be a trendline moving down.
Sideways trend – the channel of the price
When the price is moving sideways which creates equal bottoms and tops, you just need to draw a line connecting the tops and a line connecting the bottoms together. The price is considered to be in a sideways channel.
Notes when using trendlines
In an Uptrend, the price will keep going up. But if the price breaks off this uptrend line, the market trend will shift from uptrend (going up) to downtrend (going down). Conversely, if the price is in a downtrend, the price breaks out this downtrend line, the market will move from downtrend to uptrend.
If the price is in a sideways channel, there is no clear trend. It means that the market is in the accumulation phase to prepare for a new trend.
How to open orders with the trendline when trading at Olymp Trade
Remember this: Trend is my friend
If you are a short-distance trader with 1-minute orders or trade with 1-minute candlesticks, when the trend is uptrend, your mainstream should be bullish. Because in an uptrend, the probability of a green candlestick is higher than a red one. On the contrary, in a downtrend, you should actively open a Down trade.
If you are a long-distance trader from 15-minute or more, following the trend suits you very well. As long as you analyze correctly the trend is going up or down, you will open an appropriate order. Despite the price may fluctuate in a short time, as in the long term, it is forced to follow the trend. If trading this way, you will not have as many psychology issues as the short-distance trade.
Another long-distance trade is that you sit and wait for the price to go sideways with unknown trend. This is the time when the price is accumulating for an upcoming trend. As soon as the price escapes its sideways channel to form a major trend, you can open a long order depending on the fluctuation at the time. If the price escapes the channel and goes up, you can open an UP order and vice versa.
Try practicing on the Olymp Trade interface by registering a Demo account here. Good luck!