Using Trendline Analysis As Part Of Your Forex Strategy

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Often, not always, price will break a trendline and move away 10 or 20 pips. Then, it comes back to test the backside of that trendline. That’s where you enter the trade.

If the trendline break coincides with your other favorite indicators such as:

  • Pivot Points
  • Fibonacci Calculations
  • Previous Support Or Resistance

then set an entry order for price to take you in when it comes back to test that level.

That way you enter the trade at an optimum level and squeeze even more pips out of the move.

Note the examples below:

Forex Chart USD/CHF 1 Hour

USD/CHF
1 Hour Chart

See how price broke the trendline, then came back to test the backside.

If you look carefully at the chart and run your eyes left, you will see that the trendline bounce also coincides with a previous support/resistance level.

If you did some Fibonacci calculations you would also find that same point matches with 50 and 62% retracement levels.

With that convergence of factors, the trendline backside test makes a good entry point!

 
   
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