Binary Options Trend Lines
The amount of information needed to evaluate the current situation of an asset price and the market trend is massive, to make it easier and faster to read, many graphical representations have been created, to deliver critical information about the asset price trend and anticipate its moving direction.
What are Binary Options Trend Lines?
The binary options trend lines are straight lines draw on a price’s chart, which connect different points of a recorded asset price, and it is extended into the future to set as a supporting or resisting line. Trend lines are used in technical analysis to graphically represent the price trend of a particular asset and deliver this information in seconds to let the trader know if the price trend is upward, downward or it will experiment a reverse trend.
Understanding trend lines
·Price chart is the graphical representation of the asset price for a period.
·Price trend is the asset predominant price moving direction for a period, increasing its price is name uptrend or decreasing its price is called downtrend, on the other hand, when a trend changes its direction is named reversal.
·Uptrend line is formed by connecting two or more consecutive low points. In an uptrend line, the second and the subsequent low points must be higher than the previous one.
·Downtrend line is formed by connecting two or more consecutive high points. In a downtrend line, each successive high point must be lower than the previous one.
·Support line in trend lines; the support line is the same uptrend line when a low point falls below it; it may indicate a price reversal and anticipate a price fall.
·Resistance line in trend lines; the resistance line is the same as the downtrend line when a high point breaks above it; it may indicate a price reversal and anticipate a price rise.
·Reversal a potential reversal might occur each time a trend line is broken.
Using Trend Lines
· Three or more consecutive high points lower than the previous may be a downtrend indicator
· Three or more consecutive low points higher than the last may be an uptrend indicator
· Any breaks in a trend line may indicate a price reversal
· The longer the expire time, the more accurate the trading line will be
· Some other indicator may be used to confirm a current trend
Benefits of using trend lines for trading binary options
· Using trend lines you can get accurate information about a trending pattern or a price trending for an asset.
· Trend lines when are properly used can anticipate the right price movement direction, monitoring the trend lines as supporting and resisting lines will identify a reversal point when the lines are broken.
· Trend lines are easy to draw, and their patterns are easy to identify.