- 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.
- And we see that many time the market tend to take the support to these lines and also take resistance to the horizontal lines. And if that gives breakout then it may go to some other new levels.
Horizontal Lines based on different Timeframes.
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