Hi Rishi!
I think I mentioned this somewhere in this thread but in using TL's as far as the tradeable suppositions as outlined in this thread, it is best to draw your TL's on the 4-hour on up. Anything less than the 4-hour, a trading decision can be made off them, but not with the predictability as drawing them off the 4-hour, daily, weekly, and monthly will produce.
This is also worth repeating but you are looking for a TL break with the following characteristics:
1. Stronger than usual candle that broke the TL.
2. A correction back to the point the candle broke the TL and will be contained under it.
3. Another strong move back in the new trend that will go further than the original break.
If the break was not stronger than usual, then always check the candle to see if you drew it right, and if it covered the dip/peak to the 1st swing high/low.
Now, let's go to your chart, and let's assume it is a 4-hour chart.
The lower TL was drawn correctly. The dip is the correct point, because the previous one to what would have been the 1st swing low would have already had a TL break. What you would now look for is a break of the TL accompanied with a strong candle. Usually, if the TL contains, then there is a strong move back into the current trend.
The upper TL I don't like, but you drew it right.
All TL's need to have some slope in it, and not a strong slope. When TL's with no slope are broken, they tend to be accompanied by head fakes. This is because a TL with no slope does not really look like a TL.
One thing I did not cover in this thread, but I will now, which will show how to make that circa area a very tradeable opportunity for you. Rather than draw a TL (It's worthless, in this case.), draw a horizontal line at the peak, add 5 pips on to it, set your entry long, and get out of the way.
A dip or peak break, you don't wait for a correction back to it. You simply enter when it is broken.
The down sloping line on the USD/CHF you messed up on, which is giving the appearance of a false TL break, and consolidation on top of the TL, which is not suppose to ever happen.
This is how you are able to troubleshoot your own lines. Again, if they don't possess the proper qualities, then you know something is wrong.
Go further west. You see the peak. After that, go 9 candles east. That is the swing high. Those are the 2 dots that should have been connected.
I'm actually glad you posted the USD/CHF, because I like to always put in practice what I teach, even though I hardly ever post a trade. If you have read my forecasts, you know my bias is the USD/CHF is going further south. I don't like to enter a trade in a consolidative period. The breakaway is going to be as per my previous instruction in this post concerning the EUR/USD. I have an entry to go short at .9109, which is just a few pips under the dip. I drew my horizontal line at the dip, subtracted a few pips from that and made it my entry.
paul, would you draw trendlines differently on following charts or do i draw them correctly ?
i still trade the two strategies i have been trading for a long time but want to learn drawing correct trendlines on charts.
EURUSD & USDCHF H1 CHARTS
regards as always
rishi
