Determine the timing of when to buy and sell

A trend line does not actually exist but is drawn by traders to reflect the direction and strength of a moving trend. As a subjective technical analysis tool, it performs the same role as the moving average to help traders predict the market movement based on historical price fluctuation. In other words, the line is not a reflection of an ongoing trend, but only confirms a trend that has already been formed.

Time to buy

Determining the best time to buy an asset is a matter of position management in a bull market. The key principles are as follows:

1. Buy assets: After the price breaks through the long-term downward trend line, it starts to fluctuate but never falls to the extent that is below the medium-term upward trend line, or it never declines to break down the long-term downward trend line and the medium-term upward trend line.
   

2. Buy assets or increase positions: In the long course of being above the long-term upward trend line, the price breaks through the mid-term downward trend line.
   

3. Buy assets or increase positions: In the long course of being above the long-term upward trend line, the price plummets suddenly and then takes a turn to pick up to break through the short-term downward trend line.

4. Buy assets or increase positions: In the long course of running above the long-term upward trend line, the price falls but rebounds on the support of the long-term upward trend line.

5. Buy assets or increase positions: In the long course of running above the long-term upward trend line, the price falls but rebounds on the support of the mid-term upward trend line.

Time to sell

In contrast, deciding on the time to sell assets, concerns position management in a bear market. It is a matter of determining the time to sell assets and short positions. The principles are as follows:

1. Liquidate positions: the price falls and breaks through the long-term upward trend line.

2. Short positions: The price runs above the long-term upward trend line for a long time, and then takes a turn to fall below the mid-term upward trend line.

3. Short positions: The price runs above the long-term upward trend line for a long time. Then after a period of time of sharp increase, it falls below the short-term upward trend line.
   

4. Reduce or liquidate positions: The price breaks through the long-term downward trend line, and then fluctuates to fall below the mid-term upward trend line.
   

5. Liquidate positions: The price remains below the long-term downtrend line for a long time.

Summary

The trend line is a very important tool to determine the time to buy and sell assets. In trading, you should use it in conjunction with other technical analysis methods such as K-line to increase the success rate of your trading.

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Disclaimer

Please note that this article is for informational purposes only and does not offer investment advice. Gate.io cannot be held responsible for any investment decisions made. The information related to technical analysis, market judgment, trading skills, and traders’ sharing should not be relied upon for investment purposes. Investing carries potential risks and uncertainties, and this article does not guarantee returns on any investment.