Let’s take trend lines one step further, I am going to throw a few more words into the mix:

Prevailing trend: This is the long term trend the market is in.

Current trend: This is the new or current trend the market is in.

Corner: The point at which the prevailing and current trend meet.

Ok so now we can get started learning about advanced ways to use basic lines.

Triangle Trend Lines

First, let’s discuss the prevailing trend line. A prevailing trend line is the big trend line that overrides all the smaller trend lines on your chart. If you place trend lines on a 4 hour chart and then switch it to a daily chart you will notice that on the daily you can probably draw another bigger trend line. Here is an example:

The above chart is a daily chart; now let’s take a look at the same line on a 4 hour chart:

You can see on the 4 hour we have a lot more trend lines that can be drawn in. The prevailing trend is the trend that has been active for a longer period and the current trend is the newer trend that has formed in the prevailing trend. Take a look:

Here we see the new trend that has formed inside the prevailing trend and the place where they meet is the ‘corner’. This makes the shape of a triangle hence the name. So now the price is going to move through one of the trends, will it be the prevailing trend or the current trend? More often than not the price will break through the weaker current trend but sometime it breaks through the stronger prevailing trend and we see some movement. Here is what it looks like after the break:

The price broke the current trend line and rallied up.

How To Draw Them

You already know how to draw normal trend lines; these trend lines are the same thing. Maybe you have to zoom out or change to daily charts. You just look for the main trend the pair is currently in then find a small trend inside it. There won’t always be there, but keep an eye out for them just the same.

How To Use Them

It’s easy, you draw the lines, look for a corner and you wait for a break on either side and then enter. Do not make this your whole system though. This is just a small Swiss Army knife inside your arsenal of weapons.