A trend line is one of the most important things in trading as, if drawn correctly, gives important support and resistance areas one can use.
Regardless of the financial product that is traded (stocks, currency, binary options, etc.), identifying a correct support or resistance area can make the difference between a successful trader and one that is still struggling.
In the case of binary options, besides identifying a support and resistance area, the trader should also indicate the expiration date as this one really makes the difference between an option that expires in the money and one that expires out of the money, basically the difference between making a profit or not.
The recordings that are coming with this mini-educational series here on Binaryoptions.education are showing a classical example on the eurusd pair and the interpretation is based on current prices.
In order to have a trend line one should have at least two points. If the trend line is a rising one, then the trader should look first at a low and then at a higher low, and after that price should make a new high when compared with the previous highs. So actually, after a series of one low and a higher low, we need a swing higher to take the previous highs.
That is all we need in order to draw the trend line and project it forward. From this moment of time, every time price is coming to the trend line it is supposed to find support there (remember, the move is to the upside) and that would be a great place to buy call options.
The expiration date is to be set depending on the time frame the setup appears, going for hourly or two hours expiration date if the time frame is the five minutes chart, up to end of day or end of week if the time frame is the hourly or four hours chart.
The video analysis that is coming with this project also shows you how to deal with a strong trend when the move is actually channeling too well and how to buy even put options in a rising trend.
Is that even possible? Well, it is.