Trend Lines

Technical analysis:Trend Lines

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Trend Lines

An important concept in technical analysis is the determination of the market trend.

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In addition to helping to identify the prevailing trend, trend lines offer clear
indicative support and resistance levels to the price movement. As a trader, identifying those levels of support and resistance are key ingredients to successful trading.

Uptrend line

For an uptrend within the period of consideration, draw a line from the lowest low, up and to the highest minor low point preceding the highest high, so that the line does not pass though prices between the two low points

Down Trend line

For a downtrend within the period of consideration, draw a line from the highest high, down and to the lowest minor high point preceding the lowest low, so that the line does not pass though prices between the two low points
An example of down trend line (red) and Up trend line (blue):

Trend Lines
Trend Lines