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Trading the Trend Lines
Trend lines are angled lines that can be drawn on price charts, connecting swing lows with other swing lows, or swing highs with other swing highs. Occasionally, a trend line might connect both swing highs and lows.
Technical analysts draw trend lines because they expect them to become pivotal points when the price next reaches them, giving an opportunity at that moment to enter a high-probability, high reward-to-risk ratio trade. Most trend lines are typically drawn with the expectation of being used to enter a reversal (fade) trade, but they can also be used to identify and trade breakouts.
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