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Trendline

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Technical analysis
About tech analysis Trend Characteristics Support and resistance

A trend is a direction of a price.

What is a trendline

A trendline is a straignt line that shows the direction of price. In practice, the trendline is drawn either above the ‘highs’ or below ‘lows’ and it needs to touch at least three peaks/highs or troughs/lows. For example, by connecting the low points you will form un up trendline and for a downtrend line connect the peaks. The trendline should not be drawn above or higher than the price action.

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chart-brokernest

It is important to understand the concept of trendlines when studying about suppoirt and resistance. When the market is moving towards an uptrend, resistance levels are shaped as the price action slows and begins to pull back towards the trendline. 

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