All language subtitles for 2. Trading Uptrends

One of the most important common things you're going to do is actually drawing upward trend lines.

You want to identify an upward trend so you can buy in early in the trend, ride that trend out and

get some profits, and then later you'll sell when that trend starts to end.

So drawing upward trend lines is very important.

So let's add what you'll be doing maybe all the time, if you like, doing trading off a trend lines

versus, let's say, other indicators.

But always the trend line is a strong indicator on itself.

So let's take a look at how to draw and how to trade on trend lines into this.

In this last, we're going to talk about specificly how to draw and trade off of uptrend in trend lines.

So are you drawing an uptrend trend line that's going to be really your support line?

Right.

You're looking at your lowest lows and you're going to connect to your next lowest flow that precedes

a new high.

OK, I'm just going to cover these three bullets real quick.

It's actually makes much more sense when we look at the graph so graphically, but it'll make more sense

there.

And but the idea is that as long as new highs are being made, you redraw the line to connect the lowest

low before the last high and then year.

And when prices start making new highs, then you stop, you stop drawing and you extend that line at

the same slope in the future.

If anything, take away from you're going to draw this long slope line and it can be an upward facing

line.

And the idea is you're going to buy towards the bottom of or the early part of the trend and then you'll

sell towards the upper part of the trend.

And then in between will be your profit.

So this is kind of the specific definition of it.

But let's look at the example, how to trade off that to make this make more sense, because that's

a little trickier to just talk about.

Let's now actually show you how to do it.

So as you can see on this particular example here, we have a starting point.

So we're picking kind of that lowest low as a starting point.

If we look at let's say our chart looks like this, we're going to that lowest low and then we're going

to start connecting those other lows.

And we're looking at trading ranges here at the bottom of the trading range.

We're basically doing it off the bottom of the Wick's.

You could trade through the middle of the bars, by the way.

Just be consistent if you do it that way.

But almost most people, almost everyone does it this way.

We're looking at the low of the lows and I prefer that way.

And that's how I demonstrated.

But it doesn't mean you're wrong.

Just whatever you want to go through the middle of the candlesticks, just make sure you're consistent.

So as you can see, I've drawn this line and I've connected these lowest lows.

And so if I start at the bottom left where that blue line is, you can see the lows approach it like

three times.

Right.

That first kind of red along with it doesn't exactly touch it.

Nothing's perfect, but it gets you gets close to it.

Then there's another like doGet type bar where it's a very small Kandal body.

It's also red showing us the close's was lower, barely lower because it has a small body.

But you can see that there's a low to the bottom there that comes to the bar.

And then we had an uptrend or an excuse me, an update and you can see a shorter wick on the bottom

there, but you can see where I've connected those together.

So it basically is connected one to three points.

There are a lot of people will buy on that second or third touch.

That's the idea of when they're buying.

And this will introduce us to now are rules around how do we trade around this.

So this is how we draw it now.

How do we trade on this?

So there's two rules around this.

One is called the support line enteral and the support line rule.

So the support line entry rule says that you buy on the second or third touch of the support line.

In this, where I have the arrow here, you can see it's on the third touch of that.

It could have been on the second touch or near touch of that support line.

That's when you're buying.

You're in an upward trend.

You want to write the upward trend.

That's when you're buying it.

And then when you want to exit, once that support line is broken, sell as soon as possible after the

low in the range, you know, falls below the support line.

That means the trend is broken.

You can see it's approached it, but it's gone past it.

In terms of the classic support line entry and support line rule, you're you're basically selling it

to us.

That breaks that breaks that blue line.

And what's happening here is you want to confirm that the trend really is forming and that's why you're

waiting for a second or third touch of the support line, because that establishes the trend more.

In fact, the more touches it has, the more established the trend for a fourth or fifth touch, which

are very established uptrend in this case.

And the reason you want to exit out of the quickly is you want to take those profits, book those profits.

You know, you're not hoping once the trend line is broken, the trend line is broken and and that's

where you want to, you know, then sell as soon as it hits that support line and get those profits

in there.

So if we look further along here, let's say we had bought on that third touch and you can see how we've

we've gone up.

It's actually had another touch there and the prices have gone up.

And we get to a point where it goes below the blue line a little bit.

And that's when you would sell right the first time and break through that blue line.

Certainly when you have that's that other capital on the right of the line there where it's really definitely

going below it.

You definitely are selling then is the idea behind it, because the trend is now broken.

It could go sideways from here.

It could go downward.

But the trend, the definite uptrend has been borrowed.

In fact, I took this from a real security, and this is what happened afterwards, so you can see it

actually really did break the trend and start heading in the opposite direction.

So I wanted to sell and get that profit before it went down and eat up all my profits.

That's the idea behind this.

So I'm watching that that trend line.

I'm buying on the touches and I'm selling once it crosses through there.

And it's kind of an extra credit and how trendlines can kind of combine with other indicators.

If we were to look at this, is there something more going on here once we reach this point here?

Right.

So we bought let's say we bought in the Second World, so we bought a third touch.

And then we have the next kind of see periods happen and you see those two last candlesticks.

I've kind of covered up the other candlesticks for a moment because something's going on here.

Do you see the the white body candlestick, the second from the last candlestick and then that big red

candlestick there and then then covered up what's happens after that?

But if we were to look at that, we'd say, OK, we're in uptrend.

But that looks like something, right?

Think about our candlestick lessons or think about candlesticks.

And if you and this is extra credit.

But if you were to say to yourself, you know, that looks like an engulfing candlestick, right.

We're in an uptrend and that one big candlestick has engulfed the big red one has engulfed the other

one.

You know, you would be correct.

That is what it is.

We learn learn about candlesticks or learn the candlestick lesson.

That is a barasch and golfing candlestick.

There are bullish golf and candlesticks, too.

But this is definitely a bearish one, means the prices are about to go down.

Why is that?

Because we were on an uptrend.

You had a red candle body fully engulfed the uptrend and let's say white or it could be green depending

on the color.

But you have the red candle, a down day engulfing the a previous closing up.

So that's telling us from a candlestick pattern that the that there might be a turn here and going to

a downtrend.

You want to wait for that to fall in the next day where it should go back now downwards.

And in this case, it went back.

It went down.

The close was was or we had one in between day where we're actually close was a little higher, but

it broke that trend line.

See where it broke that trend line for part of the day.

That would have been a sell signal in itself.

And maybe we should have sold there.

You can sell there.

That's the idea of of a true, you know, support line breakage that you're selling there.

But if you were to wait it out a little bit more, you definitely would have a cell confirmation because

now you've got a red bar, red candlestick price bar you've got engulfing Burish and golfing and you've

got a breakage of the support line.

I mean, that's definitely their thing.

And they tell you to get out.

That's telling you to get out.

And so that's a little extra credit on this one.

First, this real one that we pulled from.

And then that's when we look at the pattern.

After that, you can see and this is from a real security, you can see that, boy, it went on a real

tear downward.

Look at all those red candlesticks right in a row.

They're just down, down, down.

And it reached the bottom, then went back up.

But then maybe there's a new trend.

We conform to trade on that new upward trend to the right that might be forming.

But if we look at this, we can see like we had a nice little uptrend.

We bought in there.

We made some profits.

The Persian Gulf in Candlestick was worrisome.

Maybe I sell there.

Maybe I'm hanging on for the trend line to be broken.

But once it is, maybe that's the time to get out.

I got a lot of factors telling me, sell, sell, sell, so to speak.