Strategy of TrendLine Trading
Expression, saying “The Trend is one’s Best Friend” is a true statement in the binary trading. We attain two kinds of trend line dealing. An asset can easily trend in two different ways, wither down or up. An uptrend, moving upwards or ascending trend the indications bullish momentum and downtrend, downwards or descending the trend signals the bearish momentum. Both the condition of market can be easily traded in their favor. When the markets begin to trend they create channels where the cost starts moving in. It can be easily identified by the lower lows and higher highs, mainly based on trend direction.
Bearish and Bullish
The bullish market shows purchasing pressure which pushes the cost higher, which in turn results in uptrend being created.
Bearish trading trend signals the selling pressure which in turn causes the price to fall, which in turn results in downward trend. These terms can be regarded as bearish and bullish momentum.
Application of Trend Lines
Drawing these types of trend lines one needs to identify nearly two points, no matter whether it top or bottom of channel. Channel lines needs to be diagonal in the orientation and moreover should be parallel too. More points that are lined up and higher time frame, stronger the channel will become. This particular rule is applicable in both the down and up trends.
Trend line dealing can be utilized in combination with the Low/High option. After identifying channel a put/low option can be easily placed when the cost bonuses from top of the line of channel. Call or high options can be easily placed when the cost bonuses from bottom of channel.
You should always try your level best in placing the trades with a direction of trend instead of doing trade against it. In reference to the picture mentioned above, we can note a downloadable channel clearly, indicating that we should place put/low options. Trend line strategy is a bit more difficult but it yields for high possibility trades.
