Trade with the trend is an old mantra that is followed by professional traders and they believe that trading with the trend increases the odds and makes your trade profitable.
But first, you need to identify the trend and the best trade entry points. professional traders can easily do this without the need for indicators or other special tools.
This guide will show you how to draw a trend line, support, and resistance, and how to use them to trade on the IQ Option platform.
Setting up a trend line
Trend lines are used for the direction of a trend and the steepness of the trend line will show you and give an idea about the trend’s momentum and indicate the price that is moving in a certain direction.
Click on the graphical tools feature on your IQ Option trading interface to set this indicator up. Then select the trend line.
Zoom your chart in and out and recognize the time period that shows the best trend.
Now click on the lowest price by touching all higher or lower if it is an uptrend. Remember that it is not compulsory for the trend line to touch all highs or lows, It only needs to connect 2 highs or 2 lows.
The chart below shows a trend line drawn along an uptrend.
Adding support and resistance to your IQ Option chart
After setting up your trend line, add support and resistance levels which are simply price ranges where retracement and consolidation occur. The upper line along an uptrend is the resistance where prices tend to reach before bouncing back. The lower line along with the uptrend where prices don’t seem to fall below for a given period is the support. In the case of a downtrend, it is upper.
Support and resistance are not fixed, they keep changing. New support and resistance levels are created when the price breaks out of a support or resistance level
Now let’s look at an example.
With the help of this chart, the Lowermost horizontal line is the support and it eventually becomes the resistance when the downtrend starts developing.
As you can see the middle horizontal line that forms a strong resistance along with the uptrend, you will notice that the price hits this level and bounces back down before breaking out to continue the uptrend.
The uppermost line forms the resistance for the uptrend.
Now, notice the trade positions to enter with these three lines.
The next trade entry is also signalled by a bullish pin bar. The only difference is that its low touches the support and the trend line touch its open. Since it’s a bullish pin bar, your trade entry should be at the opening of the next candle (2).
The final trade entry point is also signalled by a bullish pin bar. What sets it apart from the others is that its low falls within the zone where the trend line intersects with very strong resistance. Being a bullish pin bar, you should enter a buy position at the opening of the next bullish candle (3).
In case you’re wondering how long the trades should last, each position should last 5 minutes (one candle interval).
Now that you’ve learned how to trade using the trend line alongside support/resistance, I urge you to try out this strategy on your IQ Options practice account. We’d love to hear about your results in the comments section.
Good luck!
You might also want to read
Top 5 Trending
The Norwegian government pension fund has made a significant investment in India's consumer electrical equipment sector, acquiring a 1.7% stake… [Read More]
Introducing DigiToads (TOADS) - The GameFi Token Making Waves in the Crypto Market If you're looking for the next big… [Read More]
Unlocking Profitable Trades: Trade 1-Minute Options with Pin Bar Candles and Bollinger Bands! Looking for a winning strategy to trade… [Read More]
Because of the promising money-making potential, many traders are attracted to binary options trading. Those who are newcomers to the… [Read More]
You will find a variety of features on the IQ Option platform. That is the reason why it is not… [Read More]
