TECHNICAL

ANALYSIS.

TREND LINES .
WHAT IS A
TRENDLINE?
A trendline is a line drawn through a
chart to show the trend. In the context
of trading, trendlines are drawn on
price charts to show the trend in the
price. Traders use this information to
determine whether to buy or sell in the
direction of the trend. Trendlines can be
used for a stock price or
cryptocurrency. Trend lines are one of
the best-known price action indicators
used in technical analysis.
 HOW DOES A
TRENDLINE WORK?
T H E C L A S S I C WAY T O D R AW
T R E N D L I N E I S B Y D R AW I N G A
STRAIGHT LINE CONNECTING A
SERIES OF SWING HIGHS OR SWING
L O W S . A N U P - T R E N D L I N E I S D R AW N
THROUGH THE SWING LOWS AND A
D O W N - T R E N D L I N E I S D R AW N
THROUGH THE SWING HIGHS. IN
T H AT WAY T H E T R E N D L I N E I S
A C T I N G A S S U P P O RT T O A N
U P T R E N D O R A S R E S I S TA N C E T O A
DOWNTREND. TRENDLINE ARE
OFTEN REFERRED TO AS ‘DYNAMIC
S U P P O R T & R E S I S TA N C E ’ M E A N I N G
T H AT T H E Y M O V E W I T H T H E P R I C E
TREND
 Click icon to add picture

HOW TO USE TREND LINES IN TRADING?

How do you trade a trend line? The idea of using a trend line is to determine the direction of
the price trend. Traders can then to decide with the trend with the idea that the trend will
continue or against the trend because they think the trend will reverse. With both strategies,
the interpretation of the trendline is the same.

•While the price is above the uptrend line the trend is up, which is bullish.
•While the price is below a downtrend line, the trend is down, which is bearish.
•Trendlines indicate the best fit of some
data using a single line or curve.
•A single trendline can be applied to a
chart to give a clearer picture of the
trend.
•Trendlines can be applied to the highs
and the lows to create a channel.
•The time period being analyzed and
the exact points used to create a
trendline vary from trader to trader.