Downward Stock Trading Trend Lines and Channels - MetaTrader 4 Tools for Drawing Stock Trading Trend Lines and Stock Channels
How to Draw Downward Stock Trading Trend Lines on Charts - Downward Stock Trend Line MetaTrader 4 Stock Trend Line Indicator
A downward stock trading trend line is drawn above the stock trading downward stock trading trend pattern formed by consecutive lower highs, the downward stock trading trend line must connect at least two highs, with the most recent high being lower. For our stock trading downward stock trading trend examples we shall use the MetaTrader 4 technical analysis software stock trading charts to illustrate an example of downward stock trading trend.
Since stock trading price moves down in a zigzag manner stock traders normally draw a downward stock trading trend line which shows the general downward direction of the stock trading prices. In Stock trading market technical analysis, this general stock trading price direction is referred to as the TREND by stock traders. In stock trading technical analysis definition we can define this stock trading down stock trading trend line is drawn on a Stock chart showing the resistance levels (bearish market direction).
A stock trading downstock trading trend occurs when the stock trading price makes a series of lower highs and lower lows. Each high is lower than the previous high - lower high, and each low is lower than the previous low - lower low therefore showing bearish stock price movement.
Stock Downstock trading trend lines gain more validity each time stock price touches the downward stock trading trend line but does not penetrate the stock trading trend line. A stock trading downstock trading trend remains the general direction until this series of lower highs and lower lows is broken.
In stock trading technical analysis, An upside penetration of a stock trading downstock trading trend line is a technical buy stock trading signal, and usually the first indication that the bearish direction of stock trading prices may soon reverse.
Drawing a Downward Stock Trend Line - Downward Stock Trend Line MetaTrader 4 Stock Trading Trend Lines Indicator
When it comes to learning how to draw and learning stock trading technical analysis of stock trading charts, you need to know that when the stock trading market is bearish it forms lower lows and lower highs forming a downward general market direction. These are the points that are used to draw the downward stock trading trend line.
To draw this stock trading downward stock trading trend setup we use resistances and to do it correctly two resistances are needed. When stock trading price touches this stock trading trend line, then we sell and place stop loss just a few pips above the sloping resistances;
Trading This Downward Stock Trend Market Move - How to Trade Downward Stock Trend Line
When trading with this stock trading trend line trading method, this stock trading trend line setup will show the general direction of the stock trading market as downwards therefore stock traders will only open short sell stock trading trades. These are the levels where if stock price retraces then these points will provide strong resistance. This is why many short sellers will wait until stock price retraces upwards and hits these retracements levels to open sell stock trading trades. Stock trades opened at these levels have a high Risk to Reward Ratio with minimum draw down.
For Example, in the above stock trading example, a stock trader would have opened short sell stock trading signals at the resistance1, resistance2, resistance3 and these sell stock trading trades would have made a lot of profits with minimum amount of draw-down/retracement.
How to Draw a Stock Downward Channel - Downward Stock Channel MetaTrader 4 Channel Indicator
A stock trading downward channel is drawn by drawing a line that is parallel to the downward stock trading trend line and then adjusting it to touch the bottom boundary of the stock trading price movement. This then forms a downward stock trading channel and as long as the stock price stays between these two channels the general stock trading market direction is intact the stock trading market direction will continue being bearish.
Trading The Downward Stock Channel
The downward stock trading channel is used by stock traders to show levels where it is best to take profits. Stock traders will take some profit once the stock price touches the lower channel and wait for another retracement before opening a short sell stock trade again.
MetaTrader 4 Tools For Drawing Stock Channels - Downward Stock Channels MetaTrader 4 Channels Indicator
The stock trading tools to draw these stock trading channels studies on the MetaTrader 4 stock trading charts are located on the Lines Toolbar within the MetaTrader 4 stock trading platform, to access this MT4 tool bar if it is not activated on your MetaTrader 4 Stock Trading Platform, Click in "View" Next to "File" at the top left corner of the MetaTrader 4 Stock Trading Platform and click View, Then Click on Tool bars, Then Check the Lines Toolbar by clicking on it.
Below is the screenshot of these MetaTrader 4 tools: just click on this MT4 channels drawing tool and select the point to where you want to place this stock trading channels tool on the stock trading chart.
MetaTrader 4 Technical Analysis Charts - Downward Stock Channels
MetaTrader 4 Toolbar - MetaTrader 4 Tools for Drawing Stock Trading Trend Lines and Stock Channels used to obtain these stock trading trend line drawing tools is shown above, to draw these stock trading trend line setups or stock trading channels, just select the above MetaTrader 4 stock trading trend line drawing tools shown on the MetaTrader 4 stock trading software and select the two points where you want to draw the stock trading downward stock trading trend line.
This stock trading trend line stock trading strategy is one of the simplest and popular stock trading technical indicators used by stock traders to analyze the stock trading market stock trading trend direction.