Trend line as a support. $USDCAD shows a good example

This week, 13th to 17th Nov 2017 USDCAD gives a very good chart to explore trend lines and price channels. Let us see the details.

Also read : 12 important points to consider while using a trend line

Daily chart of USDCAD

USDCAD Daily chart

In daily chart, you can find the trend line is perfectly followed by the price. It has acted as bouncing pad for price. It bounced second time from the lower support trend line.

4Hour chart of USDCAD

After finding out direction from higher time frames, we do follow 4 Hour time frame chart to time the perfect entry. Lets see how the price behaved in 4H chart.

4H chart USDCAD

See, at the bottom where the support trend line goes through, we surely expect a price action behavior at this area. It exactly followed our expectation with a small pin bar and a big bullish engulfing candle.

See the candles in details.

Bullish engulfing candle.

See there was minor pin bar, then a strong bullish engulfing candle. Also all the candles are perfectly aligned with support trend line. The good entry point is just after the engulfing candle.

With proper understanding of trend lines, price channels and price action behavior, you can easily make good trade decisions. If you follow the basics of any trade, you don’t need to worry about the outcome in long run.

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