- What is a Horizontal Line?
A horizontal line represents a fixed price level on a chart. It can serve as both a support and resistance level, helping traders make decisions such as when to exit a trade. These lines are useful in identifying potential trend reversals or areas where price action may change direction.
- How to Identify Levels for Drawing a Horizontal Line:
- Look for historical price points where the market has struggled to break above or below.
- Draw a horizontal line at that level and adjust it to maximize the number of touches—these can be from either the candle body or wick.
- When the price approaches this level again, there’s a strong likelihood it may reverse or retrace from that point.
Horizontal Lines based on different Timeframes.
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