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Trendline Trading Strategy-Sell At Top Buy At Market Bottom

The Trendline Trading Strategy is a  forex price action trading system that is designed to trade the price bounce off the trendlines.

You will notice on your charts that price does two things when it comes to a trendline:

  1. it bounces off it which means it obeys the trendline or
  2. it breaks it…and when it breaks it, you can use the trendline break forex trading strategy to trade it.

This strategy is about how trade when prices bounce off the trendline.

In order for you to use the trendline trading system, you need to know how to draw a valid or proper trendline.



You need a minimum of two lower swing high peaks to draw a downward trendline (to show market in a downtrend) and two higher swing lows to draw an upward trendine (to show market in an uptrend) like the chart show below.

Trendline Trading Forex Trading Strategy

When price come to the trendine and touch it on the 3rd, 4th, 5th peak or lows etc…that’s when you buy or sell.

For more information on how to draw a trendline, check this out:how to draw a trendlines the right way in 2 simple steps.

Timeframes: Any

Currency Pairs: Any

Indicators: No forex indicators are required but you should know your reversal candlesticks patterns, as they are very helpful in giving you signals to buy or sell when price touches the trendlines.



  1. Draw an upward trendline connecting a minimum of 2 higher lows (or higher swing lows)
  2. Wait for price to come come and touch the trendline at some stage down the future
  3. Place a buy stop order 2-5 pips above the high of the candlestick that touches the trendline
  4. Place your stop loss 2-5 pips below the low of that candlestick
  5. Place your profit targets  on previous significant lower swing highs (or peaks) that you see on the chart or aim for risk:reward of 1:3

Trendline trading strategy forex


  1. Draw a downward trendline connecting a minimum of 2 lower highs (or lower  swing highs)
  2. Wait for price to come come and touch the trendline at some stage down the future
  3. Place a sell stop order 2-5 pips below the low of the candlestick that touches the trendline
  4. Place your stop loss 2-5 pips above the high of that candlestick
  5. Place your profit targets  on previous significant higher swing lows (troughs) that you see on the chart.trendline trading forex strategy


Here are some trade management techniques which you can use:

  • lock profits by trail stopping it by moving your stop loss and placing it behind swing high or lows so there is less chance of you getting stopped out prematurely if you plan to ride out the trend.
  • move stop loss to break even if price moves by the amount risked.
  • consider closing half of your position if price moves by twice the amount risked and let the other to run or to hit your take profit target.



All forex trading strategies have weaknesses and the trendline trading strategy is no exception:

  • price can break and not obey the trendline.
  • sometimes, price will just come within a few pips of the trendline and not really touch it and move away.
  • sometimes, price tricks by breaking the trendline only to reverse later and obey the trendline.

So you should be aware that such things can happen and expect them.


  • the risk to reward ratio of the trendline trading strategy is really great.
  • its based on price action.
  • if the setup is good, you can sell at the very top and buy at the very bottom of the price swing whilst keeping a very tight stop loss which really also has a very less chance of getting stopped out prematurely.


A better way to trade the trendline trading strategy is to use reversal candlesticks as your trade entry confirmation.

What do I mean by that?

Well, when you see price heading up to a falling (downward) trendline, look for bearish reversal candlesticks like these as price touches the trendlines to sell:

bearish reversal candlesticks


If price falls down and touches an upward trendline, look for bullish reversal candlesticks for buy entry confirmation:

bullish reversal candlesticks

The use of reversal candlesticks like above really enhances your trade entry and makes sure you are on the right side of the market when making a trade because of the price action signals given by the reversal candlesticks.

Click Here: Free Forex Trading Signals

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14 thoughts on “Trendline Trading Strategy-Sell At Top Buy At Market Bottom”

    1. Any one of those 2 lines is a valid trendline. If price breaks them, consider it as trend change and use trendline breakout strategy to sell. If one breaks, next thing the price has to content with is the second trendline.

  1. Based on just price action technical analysis, here are 3 possible situations that can happen. See chart below.

    Watch out for possible bull trap if price breaks the major resistance level and goes up…It may be a trick.

    The reason I say this is because if you look at the chart closely, the UP move is pretty much extended already and with the major resistance coming into play, I would not be thinking of buying.

    Think about the reaction of SMART MONEY TRADERS that have already bought way down below and now as the major resistance level comes close, what do you think they are going to do?

    Keep buying????

    I don’t think so…they have made their profits and rode up the uptrend wave and once that resistance level is hit, the most likely thing is for them to take profits and BAIL out.

    Guess what this action does to price when profit taking happens?


    If I was trading this setup, I’d be watching for BEARISH SIGNALS to go short, which may include that main upward trendline break I just drew on the chart below. Also watch for bearish reversal candlestick forming on the resistance zone etc to go short.

    Risk reward for such setups are really excellent if trade works out as anticipated and stop loss should be pretty tight.



    1. Thanks Rkae y
      How vividly you settle down all this. Now the art is to identify where we are treading among st these 3 scenarios you carved out.
      Rkay can I consult you on my market. If yes where I should I wrtie to you on this public network or you can give me some other contact.
      What I like is your minimalist approach devoid of many indicators. When things get simple I think we are moving in right direction because we often wisdom is lost in noises and solutions are always simple.

      1. Hi Vijay,

        Ask your questions or attach charts here so that everyone that reads can benefit. That would be a good thing I believe.

        You can post/attach your chart in here when you are commenting as well, just like I did when replying to you.

        How to attach charts to comments:

        Just under comment box, you’ll see the “ADD COMMENT”, button..
        And just under that, you’ll have a “Select an image for your comment (GIF, PNG, JPG,JPEG)”.
        Then click the “Choose File” button and you have to go into your computer to get the image to attach.


        1. I have attached a chart of nifty
          Here the trend which was started from feb lows is only confirmed as late as last week when three points fall on the same line.(trend 2) . So can’t say from feb that this is the trend to follow.
          So how to trade from Feb To september.
          I have drawn a trend 1 which the chart is respecting for a long time and then suddenly it goes away from it.
          So how to identify which trend to follow. In hindsight it is visible but in real time it is perplexing

  2. Hi RKay
    Many a times a trend line is broken and then it goes into consolidation phase . And then again resumes its previous path but due to time decay trend line goes very far from the real picture. So in consolidation does this becomes redundant and how to identify the consolidation from a break

    1. Hello Vijay, whatever the market does to trendlines is out of our control. You just trade the trendline bounce or the trenline break. Yes you will see consolidation after trendline breaks and the way i trade them is to make sure consolidation happens in a level of importance ,like a broken trendline retest and then confirm with reversal candlesticks to buy or sell

      1. So nice of you to reply.
        Is it necessary that the trend line will depict the situation on all time frames though you mentioned it but I want to confirm.
        RKay if time permits please see this link

        This is the chart of Indian Market.

        I have tried to draw the trend line on Week scale from the low of FEB 2016 lows to this time. What I have found that we are at a very critical stage of breaking or bouncing from it. If it breaks it and stays there for a day or two sould I confirm it by seeing the crossover of 9 ema and 18 ema.
        Please tell me is the right trend line I have drawn. I know you ar

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