Drawing Upward Trendlines & Channels

An up-wards trend line is a line drawn on the Bitcoin trading chart when the general trend of the prices is moving upward and hence this line is drawn below these upward trending prices by connecting at least two lows of the upwards price trend. This line will show the general trend of the market to be upward.

The example below explains this concept & explains how prices move when in an upwards trend. When the market is moving upwards it keeps forming new support zones as it moves upward and these support zones are the ones used to draw the upward trend line.

Because the market heads in a zigzag manner, traders will normally draw a trend which shows the general upward trending direction.

Upward Trending Market - Bitcoin Trading

An upwards trend occurs when the prices of Bitcoin keep making consecutive higher highs and higher lows. Each high is higher than the previous high - higher high, and each low is higher than the previous low - higher low.

The Upward trend lines gain more validity each time the market price of Bitcoin touches the line but doesn't penetrate it. An uptrend remains in place until this series of higher highs & higher lows is broken.

A down-side penetration of an upwards trend line is a trading sell trading signal, & usually the first indication that an up-trend might soon end or start to consolidate.

Drawing an upwards Trend Line

When the online Bitcoin bitcoin market moves up it forms higher highs and higher lows forming a bullish market movement. An upwards trend line can then be drawn by connecting these higher lows.

To draw this setup we use support zones made by the market prices. To draw an up-wards trend line correctly 2 support zones are needed. When price touches this upward trend line we buy and place a stoploss order just a couple of pips below this upward trendline. Diagram below shows an example of an upwards trendline.

Upward Trend Line - Bitcoin Trading

The trend line setup will show the general direction of the Bitcoin market as bullish therefore traders only will open buy trades as long as price movement is within this setup and within the support areas. These are the levels where if the market retraces then these points will provide strong supports for the Bitcoin price. This is why many buyers will wait til price retraces downwards & hits these retracements levels to open buy trades.

Trades opened at these levels have a very high Risk : Reward Ratio and are very profitable.

In the above set-up the trader would have opened buy/long trades from the signals generated at the support1, support2, support3 and these trades would have made a lot of profits with minimum amount of downdraw down/retracement. This is why many Bitcoin traders like to trade using this trend line trade setup.

Drawing Upwards Channel

An upward channel is drawn by plotting a line which is parallel to the upward trend line & then this new line is adjusted to touch the top boundary of the price movement. This then forms a channel of the price and as long as a price stays between these two channels the bullish market movement of Bitcoin prices will continue heading up.

Upward Channel - Bitcoin Trading

Trading the Upward Bitcoin Prices Channel

This upward channel is used by Bitcoin traders to show levels where it best to take profit orders. Bitcoin cryptocurrency traders will take some profit once the price touches upper channel & wait for another retracement before opening another buy trade again.

MetaTrader 5 Tools for Drawing Upward Trend Line and Channels

The tools to draw these setups on the MT5 are located on the MetaTrader 5 line drawing toolbar within the MetaTrader 5 platform, to access this tool bar if it isn't activated on your platform, Press in "View" Next to the "File" at the top-left corner of MetaTrader 5 and click "View", Then Click on "Tool Bars", Then Tick and select the "Lines Tool Bar" by pressing on it.

Shown Below is the screen-shot of the MetaTrader 5 trend lines drawing toolbar. To draw a trend line on a Bitcoin trading chart click this tool and select the point where you want to draw.

MetaTrader 5 Toolbar for Drawing Upward Trend Line and Channels

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