Trend lines are the most common form of technical analysis used today but are one of the most underutilized as well.
If drawn correctly, they can be as accurate as any other method. Unfortunately, most traders don’t draw them correctly or they try to make the line fit the market instead of the other way around.
In their most basic form, an uptrend line is drawn along the bottom of easily identifiable support areas (valleys). In a downtrend, the trend line is drawn along the top of easily identifiable resistance areas (peaks).
To draw an UP TRENDLINE, pull a line by using 1st lowest point upward to 2nd highest low
point.
For a DOWN TRENDLINE, pull a line by using 1st highest point downward to 2nd lowest high point.
If drawn correctly, they can be as accurate as any other method. Unfortunately, most traders don’t draw them correctly or they try to make the line fit the market instead of the other way around.
In their most basic form, an uptrend line is drawn along the bottom of easily identifiable support areas (valleys). In a downtrend, the trend line is drawn along the top of easily identifiable resistance areas (peaks).
To draw an UP TRENDLINE, pull a line by using 1st lowest point upward to 2nd highest low
point.
For a DOWN TRENDLINE, pull a line by using 1st highest point downward to 2nd lowest high point.
