To increase the profits, most of the investors and traders in the share market include trend lines in their charts. As many traders use them, they have become very popular. They are the most attractive points on a trader’s chart that leads to more buying and selling. A trend line actually is a line that connects the low points to the high points of a particular pattern or trend. For instance, if you have a price trend in the upward direction, then you can join any two of the high points using a line to show the area where the resistance is high. You can also join two low points to show the region where the support will be strong.
Hence, you can keep a watch on these lines and sell your shares when the price reaches the upper line. In addition, when the price reaches the lower line, you must have enough patience to wait for the price to increase and get closer to the upper line. However, as these lines are not set by any rules and thus, it is very for you to manipulate them. Hence, you will have to wait and see whether the price after reaching the trend line reverses as expected before reaching the new position.
The best way to make money is by trading at the reversal. In fact, waiting for the trend lines to break is also a good option that you can try. Waiting is the best option, as it can help you much as compared to trading in the same trend line. This is because there are chances of an increase in the prices by a huge amount in the new trend line compared to the old one. This works better on the shares that the traders trade more actively. Thus, there are many investors and traders involved in this procedure, who check with the same trend lines from the same charts. If the lower trend line is broken, then it is better to wait for the upper trend line to be broken, as it will be beneficial in the long run.
You might even go through situations when there will not be any specific trends. Such periods are consolidation periods. During such times, the trend lines will be horizontal lines. These horizontal lines represent the low and high points. You just have to wait for the prices to go above or below the horizontal trend line. This provides you with a very good opportunity to get started. This way, you will be able to get an idea about the variation in the price that might occur in the future. This will help you in picking up the best shares and earn maximum profits from them.
You just have to make sure that you keep the basic things in mind while taking care of the more complicated stuff such as the trend lines in a chart. The combination of both basic, as well as the complicated stuff in the chart, will eventually help you earn quite a handsome amount.