How to Draw Trendlines in Charts?
Updated: Aug 29, 2021
People have tried just about everything to succeed in trading and believe complex theories give good results.
But simple things work wonderfully well in life and as well as in trading.
The trend line is one such simple tool in technical analysis that can offer much help in all types of trading, be it intraday trading or swing trading.
A Trend Line is a straight line drawn on candlestick charts by connecting two or more price peaks, which reveals the trend of the script, support, and resistance points, and allows to spot any excellent trade opportunities.
Below are some useful references to draw a trend line:
1. Price Peaks
2. The Slope of the Trend Line
3. The price should respect the Trend Line
You should connect a minimum of 2 peaks to consider it as a valid trend line.
Above is the example of a trend line that connected 4 peaks.
To be precise, it is also called a Support Trend line.
Image 2 shows another example of a trend line that connected 4 peaks.
To be precise, it is also called a Resistance Trend Line.
A trend line can be considered as a powerful trend line when it connects more peaks.