Trend lines in the Zone Trade

To find a trend line on a chart, you need to look for two points – two swing highs for a downtrend and two swing lows for an uptrend.

Drawing a trend line in a downtrend

For a trend line in a downtrend you are looking for a higher high followed by a lower high. You draw a line from the first high to the second high and extend the line out on the chart . You will look for a long trade when the price returns to the trend line for a third time. Unlike the traditional method of trading with trend lines, instead of entering into a short trade at this point, you will wait until the price breaks through the trend line and tests it again from the other side as support.

Drawing a trend line in an uptrend

For a trend line in an uptrend you are looking for a lower low followed by a higher low. As with the trend line in an uptrend, you draw a line from the first low to the second low and extend the line out on the chart. You will then look for a short trade when the price has broken through the trend line and tested is again from the other side as resistance.