Question
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How to set up lines for price action trading?
8 Answers
<p id="isPasted">Look for significant peaks (swing highs) and troughs (swing lows) on your price chart. These are points where the price temporarily reverses before continuing its overall trend.</p><p>Once you identify swing highs and swing lows, draw horizontal lines across these levels. These lines represent potential areas of support (swing lows) and resistance (swing highs).</p><p>Focus on the swing highs and swing lows that have been tested multiple times. The more times a price level has acted as support or resistance, the more significant it becomes. Look for at least two or three touches to confirm the validity of the level. …</p>
<p id="isPasted">Lines in price action trading primarily refer to trend lines and support/resistance levels, both of which help identify potential trading opportunities. Here's how to set them up:</p><p><strong>Trend lines:</strong></p><ol><li><p>Identify the trend: Look for a series of higher highs (uptrend) or lower lows (downtrend).</p></li><li><p>Connect the swing points: Draw a line connecting at least two swing highs (uptrend) or two swing lows (downtrend). The more points the line touches, the stronger the trend indication.</p></li><li><p>Extend the line: Project the line beyond the last touch point to anticipate future price movement.</p></li></ol><p><strong>Support/resistance levels:</strong></p><ol><li><p>Identify price areas: Look for horizontal levels where price has repeatedly bounced off in …</p></li></ol>
<p id="isPasted">Setting up lines in Bob Volman's price action methodology is about identifying barriers where price is likely to pause or break, rather than just connecting random peaks and troughs. Volman emphasizes a "naked chart" approach with very few lines to avoid clutter. </p><p><strong>1. The Core Moving Average</strong></p><p>Before drawing any manual lines, set up your primary reference point:</p><ul><li>Indicator: 25-period (for 5-min charts) or 20-period (for 70-tick charts) Exponential Moving Average (EMA).</li><li>Purpose: This acts as a "dynamic support/resistance" and helps visualize the "squeeze"—where price is sandwiched between the EMA and a horizontal barrier. </li></ul><p><strong>2. Drawing Horizontal Barriers (Support & …</strong></p>
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