Practical Exercise #3

[Charles Humpoletz]

Hello, I’ve attached a chart from Exercise #3. All comments appreciated.

Thank you

Charles

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[Rich Fitton]

Hi Charles, looking good. Just remember to look for your countertrend lines during an uptrend by joining the highs of the price action. All the best, Rich

[Anthony Jones]

Hi Rich

When does a counter trend line become a major trend line? I know the attached chart is for Brent Crude but the same would no doubt apply for any forex pair. Brent has been in decline since 24th June 2014 and reached its bottom (so far) in January this year. A counter trend line drawn on 11th February and a second connecting March. The price has been following this line all the way. So when can this counter trend line be classed as a major line?

Regards

Tony

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[Rich Fitton]

Hi Tony,

It’s all a matter of the timescale you’re trading on really. A countertrend on a weekly chart might actually be the MAJOR trend as far as a daily chart trader is concerned. You’ll always have lines going in both directions. But it’s just what is most relevant to the kind of trading you are doing personally that is key.

For us FXBAers, if you plot all the lines on your daily chart and just continue to adjust or discard them as the price action develops you can’t go wrong. Don’t worry too much about applying labels to them, it’s what the lines are showing you in terms of directional bias (when used in conjuction with control etc.) and potential support/resistance areas that gives them their power.

[Helen Edwards]

Hi Rich – here is my first ever attempt at putting in a trend line and a couple of counter trends.

Trying also to get to grips with Metatrader which at times the simplest things seem so difficult.

Helen

 

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[Rich Fitton]

Hi Helen,

All looking good 🙂 The one you had in late April extended off the lows of those 2 adjacent bars (before the rally) so sure, it would have been a good one to have on the chart when looking for potential targets as the market moved back down.

Let me know if there’s anything in particular you’re still struggling to get the hang of in Metatrader.

[Author]

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