Rules for trading trendlines

It's Saturday morning and I just poured a cup of coffee. Even though I prefer trading days, I do like the forced break of having no forex trading with weekends off!

Today I'm going to give some quick tips about trading trendlines, then I'm off to the beach to surf some non-forex waves

When looking at trends, remember the following:

1. Draw your trendlines (inner, outer, and long-term outer). This will help you determine if the market is trending up or down, or if a trendline has been broken.
2. Locate the price at which you anticipate the market will bounce (at the trendline).
3. Find the last level of support or resistance to determine where to place your stop loss order.
4. Practice sound equity management. If you can't afford the potential loss (the loss you would incur should the market reach your stop loss order), don't make the trade.
5. Create a trading plan. Trade the plan.

Follow these rules and you'll prevent yourself from lots of dumb mistakes. If you find that you can't follow a rule, it's telling you not to trade. If you can't draw trendlines, anticipate a market bounce, find support or resistance levels, trade within proper equity management guidelines, or create a trading plan….

JUST DON'T TRADE!!!

The time will come when you can follow these rules and the forex will still be there.

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