Trend Lines
A trend line is drawn, on a bullish market, along the bottom of the trend to indicate when the price is going to bounce so you know when to enter a trade. Trend lines are probably one of the most influential indicators out there, and probably the most underutilized. All you have to do to draw a trend line is to locate either a major top or bottom and connect them going through as many bars as possible. A general rule of thumb is that it has to be touching at least three candles for it the be valid. The example below is from the massive bearish move from the GBP/USD throughout 2014. Ignore the horizontal lines.
Key Support and Resistance
Key Support and resistance is by far my favorite 'indicator'. They can either be drawn against historic prices or recent swing highs/lows.
In the diagram above you can see resistance is drawn on the swing highs and support is drawn on the swing lows. These levels can be vital in knowing when the price is going to set up for another run.
In a bullish market, resistance becomes support, in a bearish market support becomes resistance.
Exponential Moving Averages
50 and 200 EMAs are the most popular of the lot. A line traces along with the price to give an average price over either 50 bars or 200 bars. This gives us a good idea where price is heading. You should rarely trade into a EMA.
If you have any questions regarding this lesson or anything about Forex I'll be happy to help. Please comment below.
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