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Forex Tutorial #2: Types of Trend Lines

In this tutorial, I will be sharing with you something known as the medium and long term trend line.
Have you ever experienced the market slowly taking back all the profit you have created as the price started to reverse. The worst part is you do not even have an idea of why this happen.

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Therefore I will share with you something that I have found out after these years of trading. What I find out is this usually happen after the price hits something known as the medium and long term trend lines.

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The problem with most traders is they do not even know that these level of support and resistance exist! That is why they see their profit slowly being taken back by the market without knowing what hits them.
The long term trend line is drawn by connecting several major swing highs and lows of a long period of times while the medium trend line is drawn using a shorter period of times. Due to the longer time involved in the drawing of the long term trend line, it is usually considered as a stronger trend line and you will find the price being repelled by it most of the time.
However, if the price manages to break through it, there will usually be accompanied by a huge movement in the direction of the breakout.
Here is how you can trade the medium and long term trend line:
You can make use of the medium term trend line as an entry signal, when you see the price breaking through the medium trend line, you can enter a trade in the direction of the breakout. As for your exit position, you can set it at the long term trend line as it is a very reliable support and resistance.

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Alternatively, you can also use the medium term and long term trend line as a scalping tool. Due to the strong level of support and resistance of these levels, you will find the market respecting these levels quite often.
With this in mind, you can then setup scalping trade with these lines. When you see the price moving towards the medium or long term trend line, you can then enter a reversal trade to trade the repulsion. The best way is to add in some indicators that can help you to increase your probability of winning.
The medium and long term trend line has been a great help to me and I hope that you have benefited from this tutorial as well.
To learn more about how to make use of trend line and my closely guarded trend line strategy, you can take a look at the book below.

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