The trendline is a very useful tool that can be found on the Pocket Option platform. Its main goal is to track price changes along with the trend. This tool is a graphic, which just means that it won’t show up on its own. You’ll have to do it on your own. But using the trendline won’t be as hard as it sounds at first. With this guide, you’ll soon be a pro.
Note: We’ll show you how to use the trendline when trading in an uptrend, but it’s the same when trading in a downtrend. Just follow the rules we’ll show you here.
We’ve already said that the goal of drawing the trendline is to follow the changes in price. But it only works for the way things are going now. It was meant to connect higher highs and lower lows in an uptrend. When talking about a downward trend, it’s natural to talk about lower-highs. Now, let’s talk about the main words.
Uptrend – basic terms you might need to be familiar with.
UPTREND -This is the first thing you need to understand. It means that prices are going up. The longer bullish candles on the chart show that bulls are in charge of the market (green color). As prices go up, so do the heights of the peaks. In the next picture, you can see that peaks 2 and 4 get higher from left to right.
CORRECTION MOVEMENT –Even if there is an uptrend, that doesn’t mean that sellers aren’t doing anything. In fact, they work all the time to bring prices down. And it makes prices go up and down. When they get a handle on the market, prices will have to go down. This is what we call a “correction movement.” But soon, buyers will jump in and take over the market. This will cause prices to go back up.
In the diagram that comes next, the movement of the correction can be seen between points 2 and 3. Number 2 shows the movement during the most active time for buyers. Still, the sellers aren’t too far away, and they’re lowering their prices until they get to point 3. During this time, buyers still act, and in the end, the price changes again, going up and reaching point 4.
Keep in mind that every trend will have a correction movement. When we are observing an uptrend, you might notice some bearish candles among bullish ones. Throughout the trend, these areas of correction create points of support and resistance.
How to use the trendline while trading on the Pocket Option platform.
You will have to draw the trendline on the chart before you can use it. To do this, you need to first open the Japanese candle chart. Choose candles that light up every minute. Then you choose the trendline from the list of graphical tools. Now you can draw your trendline, just like we did on the diagram below.
Which moment is the best to enter the trade while using the trendline on Pocket Option?
Look at the chart beneath.
The peaks are marked 2, 4, 6, 8, and 10 and show that the trend is going up. You already know that those are the corrections. The price goes down a little bit, but then it goes up again. At these levels, it’s not a good idea to start trading. This would mean that you would have to sell, but the trend is still going up.
It is best to buy at points 3, 5, 7, or 9 when the price is much lower. Remember that the trend is probably going to change at some point in the future. As the trend moves forward, your trading positions should become more short-term. So, if you’re able to get a position at point 3, your long position should be held for a lot longer than if you enter at points 5 or 7.
Using the trendlines to help you reach your goals can be helpful. Putting them on the chart is pretty easy. They will help you figure out if a trend is real or not.
Go ahead and use this tool on your Pocket Option demo account right away. After you’ve used it a few times, you’ll be ready to use it with real money. Just be very careful, because trading has no guarantees. Don’t forget that we’d love to hear from you, whether you had trouble getting it or got it right away.