Add this invaluable extended trend line to your WTI chart
There is an extended trend line on the WTI chart that has proven useful time and again. WTI traders must add! Extended trend lines have features that make them special. Features listed here and how-to-draw tips.
An extended trend line is a trend line that has proven itself to be very useful support/resistance line. Some features to take note of an extend trend line:
- Proven itself to be both support and resistance in the past.
- Long duration and therefore significant.
- Tested and verified multiple times in the past and therefore significant.
- Still valid.
- Highly likely to come back into play in future.
- An extended trend line is drawn and works like a trend line but not all trend lines are serve as extended line.
In this chart of WTI below, the lower line qualifies as an extended trend line and possesses all features listed above. WTI traders should insert this line as it is a must-watch feature.
To draw it exactly the way I drew in this chart, use a ‘Parallel Channel’ tool on Tradingview, ensure the ‘Magnet’ feature is turned ON and connect candle-close at points A and B. Based the line parallel to AB down to point C also at candle-close. If it is not clear, switch to line chart, connect turning points A and B and then drag parallel to turning point at C. Do this on weekly chart.
This is what the line and its accompanying price action looks like on the daily time frame.
Useful charting habits that help to uncover strong useful trend lines like the extended one here includes:
- If your chart platform has an ‘Extend’ feature for trend lines, make sure it is turned on.
- Make a habit to inspect the lines you drawn on the left (before) and right (now, after).
- Using a parallel channel or equidistant channel tool can help uncover trend lines that your eyes miss.
Common sense guide and special tips involving trend lines can be found here.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’.
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