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Simple Trendline Day Trading Strategy

Simple High Probability Trendline Strategy
How do you draw a trendline correctly?

You draw a trendline by connecting at least two swing high or lows and extending the trendline into the future to show you the direction of the trend and resistance and support levels you can trade.

Below you will see a simple trend following strategy on how to trade trendline bounces and find strong support and resistance levels using trendlines.

To be successful in trend trading, you do not want to fight the market but instead, recognize and follow the trend (the trend is your friend).

A trendline is a line that connect at least two highs or at least two lows and extended into the future to show you the direction of the trend and possible resistance and support levels.

Trendlines are a very visual and reliable representation of support and resistance in any timeframe.

How To Trade Trade Trendline Bounces

How To Draw Trendlines Correctly

  • Find recent highs and lows.
  •  Draw a trendline between (and extend) rising bottoms for an uptrend.
  •  Draw a trendline between (and extend) falling tops for a downtrend.
  •  Trade in the direction of the trend.
  •  When you have a bullish trendline, uptrend, you want to enter on the first bounce of the trendline that you have extended from the previous rising lows.
  •  When you have a bearish trend line, downtrend, you want to enter on the first bounce of the trendline that you have extended from the previous falling tops.

Simple Trendline Trading Strategy

These bullish and bearish levels of support and resistance will give you good trades if you know what to look for and trade in the direction of the trend.

Trendlines are created by connecting rising bottoms to show an uptrend, or falling tops to indicate a downtrend. At least two swing bottoms or tops are needed for it to be a valid and strong trendline.

You want to take your trade at the third touch and expect a bounce from the line or watch for a possible break of the trendline giving you an opportunity to trade the trend reversal.
how to use trendline
EURJPY daily chart by TradingView
how to draw trend lines correctly
AUDUSD 4 hour chart by TradingView
In your trendline analysis, remember that levels are not exact and sometimes price will reverse before the support or resistance level and sometimes not.

You can also duplicate trendline (connecting tops of the swing for a bearish trend and bottoms for a bullish trend) and move it to the opposite points constructing trendline channel to get your take profit targets.

This simple trend following trendline trading strategy can be used for both a day and swing trading.

Why Trade With The Trend?

Any trend following strategy is based on the technical analysis of market cycles and tend to move upwards or downwards over time. 

An uptrend in trading is when the market cycles up making higher highs and higher lows. 

A downtrend is when the market cycles down with lower highs and lower lows.

How do you trade trend following strategies profitably?

First step, you need to analyze the market to determine the trend (a good way is drawing trendlines).

Second step, you need some rules that will help you determine when it's the best to enter and exit trades.

Third step, you trade the trend, until the end when it "bends".

How can you actually use this?

A trend trader aim to buy in cycle lows and sell in cycle highs (in an up trend) or short in cycle highs and cover in cycle lows (in a down trend).

“The trend is your friend” is one of the best known trading quotes, although it’s message is incomplete. The complete quote should be, “The trend is your friend, until the end when it bends.”

Trading with the trend give you a higher trading edge (an advantage over other people).

Trading with the trend is a simple rule that gives us an edge when trading, and it is important because trading is a zero-sum game, those with a trading edge win, and those without one lose.

Do You Want Accurate
Trend Reversal Signals?

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Johan Nordstrom Professional Trader Risk Management
I'm a family guy in my early 30's who learned how to trade the markets in a simple yet effective way. During university, I studied investing and graduated with a master's degree in risk management. Quickly, I realized that I was onto something. I started helping friends and taking students. My students started getting results, spent less time in front of their screens, and their accounts grew consistently. Learn more about me here.
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