TRENDLINES
&
STRUCTURES
2 Main Components To Identify A Trend
Structure Levels
Structure levels are price
points where there's a
significant reaction - either
price finds support or price
rejects
+
Trendline
Trendlines are a diagonal line
which can be drawn by
connecting the lows or
connecting the highs - acts a
form of support/resistance
=
A Solid Tradeable Trend
Once combined, you can
easily identify a trend and
find entry opportunities
in line with the trend
Drawing Structure Levels
Step 1
Find a chart where price
looks to be trending in one
direction
Step 2
Mark out where price reacts
significantly - Where price
reverses heavily in the
opposite direction
Step 3
Draw a rectangle box
where you have marked
out where price has
reacted significantly.
You now have structure
levels.
Structure Levels Key Points
Where price reverses, mark
that level and extend a
rectangle box right.
Previous resistance can act
as support.
Structure levels should be
used as a guide. Price can
spike below or hover above
level.
Structure levels can be
drawn on all timeframes.
Higher Timeframe more
reliable.
Structure Level Example
1
STEP 1
Find a chart where price
looks to be trending in one
direction.
We chose EURJPY Daily
timeframe in this example.
We can see that price
keeps pushing higher and
higher = uptrend.
Structure Level Example
2
STEP 2
Mark out where price
reacts significantly Where price reverses
heavily in the opposite
direction
Whenever we saw price
move in the opposite
direction, we marked it out
with a yellow box.
Structure Level Example
3
STEP 3
Draw a rectangle box where
you have marked out where
price has reacted
significantly.
We can see that price
reacted to the structure
levels more than once.
We can use this to forecast
where price may react next!
Drawing Trendlines
Step 1
Step 2
Step 3
Find a chart where price
looks to be trending in one
direction
Connect the first 2 lows with
a line.
Extend the line right.
You now have a trendline
where price may find
support.
Trendline Key Points
Find the first 2 lows and
connect a line. Naturally it
should be a diagonal line
Extend the line right and
you'll find that future price
action reacts to that
trendline.
Price can sometimes spike
through trendlines.
We use candle wicks to draw
trendlines. Not candle
bodies.
Trendline Example
1
STEP 1
Find a chart where price
looks to be trending in one
direction.
We chose EURJPY Daily
timeframe in this example.
We can see that price
reversed from the bottom
and is making its way up.
Trendline Example
2
STEP 2
Connect the first 2 lows
with a line.
Once we have the trendline
connecting the two lows,
we can extend it and
watch for future price
action near the trendline
and trade accordingly.
Trendline Example
3
STEP 3
Extend the line right.
As you can see, price
reacted to the trendline a
few more times before
breaking down.
Trendline strategies can
be incredibly effective if
used correctly.
Stacking Up Confluences
On its own, structure levels and
trendlines can sometimes be
traded.
Where you excel is when you
combine both of these together to
get an even higher chance of a
trade set up playing out.
See next page to see an example of
a chart looks with both structure
levels and trendlines combined.
Trendlines & Structure Levels
First Entry: Risk entry based on just
structure level.
Second Entry: Price above
trendline (therefore, price is in an
uptrend). Entry based on the
rejection of structure level which
was above newly formed trendline.
Third Entry: Price approached
structure level AND trendline. Entry
on bounce of these 2 confluences.
STOPLOSS: BELOW Structure &
Trendline