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How To Trade Trend Line Breaks

You've probably seen them a million times. I mean they are everywhere. They go up. They go down and sometimes they can make these weird patterns.

Don't know what I' m talking about yet?

I'm talking about trend lines of course.

There are two types of trend lines. These to trend lines are called ascending trend lines and descending trend lines.

An ascending trend line progress up in an uptrend.

GBPUSD is making higher highs and higher lows. The trend line guides the trend.
GBPUSD Daily uptrend

A descending trend line progress downward in a down trend.

Price is making lower highs and lower lows. The descending trend line is guiding price.
Forex Price Chart Down Trend

If you prefer a video visual, watch this video below as I analyze GBPNZD break an ascending trend line and what can potentially happen next.

Once price breaks trend lines you want strict rules to trade in the opposite direction. For example, if price breaks a trend line that is going up, the objective is to trade in the downward direction. If price breaks a trend line going down, the objective is to trade in the upward direction.

Conclusion: Trend lines are meant to be broken and trading in the opposite direction. Just like a road, you cross it so you can get to the other side.

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