Well, if you are looking for some proper information about forex in the internet, then you are most likely to find some articles that are related to trendline analysis and also trendlines. In fact, let’s mention Tom DeMark, he is a specialist and professional in the field of technical analysis of the market, and his work actually spells out some particular innovative techniques when it really comes to utilizing trendlines.
Of course, much essential information in the internet is of only general nature. Besides, many different articles are obviously written about this kind of market by those individuals who are certainly not foreign currency traders themselves. But from the other side, Tom DeMark had a quite long career with those institutions which are trading futures, stocks, options and also foreign currencies. For sure, his main guidelines on the usage of those trendlines are quite specific and they also can be quite helpful and useful to all newcomers and beginners who are actually looking for some efficient information on how exactly to utilize standard forex indicators.
Thus here is a quite brief step-by-step description of how exactly to draw such trendlines. It is necessary for you to note that the term swing low and also swing high which are also called cycle low and cycle high definitely refer to the several main points. In fact, in a downtrend the swing low is actually the wick of that candle which is much lower than so called wick of the candle to the right and left. Moreover, in an uptrend this swing high is certainly the wick of a candle which is much higher than the wick of the candle to the right and also to the left.
Without any doubt, the more candles to the right and to the left which are higher in the swing low and also lower in the swing high really make the cycle or swing much more significant. Well, an uptrend is exactly where the price is clearly making higher lows and also higher highs. In addition, a downtrend is particularly where the price is obviously making lower lows and also lower highs.
But now let’s talk about drawing DeMark trendlines. First of all, we will mention drawing trendlines in the uptrend. It is necessary for you to examine the bottoms of all available candles on your forex chart and also you need to identify just the most recent candle wick which is lower than those candle wicks to the immediate left and right of it. And finally, you should look on your chart and also identify the previous low candle which actually has candle wicks that are higher to the immediate left and right of it.
Surely not a single piece of knowledge can be a 100% guarantee against losses, in particular on Forex, but sometimes even one Forex books can be of big service to you.