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Updated Nov 16, What Is a Trendline? Trendlines are easily recognizable lines that traders draw on charts to connect a series of prices together or show some data's best fit. The resulting line is then used to give the trader a good idea of the direction in which an investment's value might move. A trendline is a line drawn over pivot highs or under pivot lows to show the prevailing direction of price.

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Following Unfollow Trend Lines Trend lines can be used to identify and confirm trends. A trend line connects at least 2 price points on a chart and is usually extended forward to identify sloped areas of support and resistance. Lines with a positive slope that support price action show that net-demand is increasing. As long as the price action stays above this line, we have a bullish trend.

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But one question still lingers among Forex traders — how to draw trend lines? What Are Trend Lines?

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He has provided education to individual traders and investors for over 20 years. Article Reviewed on July 21, Gordon Scott Updated July 21, Simply put, an area of support is where the price of an asset tends to stop falling, and an area of resistance is where the price tends to stop rising. But traders really need more information about support and resistance beyond those simple definitions before they attempt to make trading decisions based on those areas in a chart.

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Now before I dive into specific Trend Line strategies and techniques, you must first learn how to draw a Trend Line correctly. And which to ignore? An example: Because a Trend Line can also alert you when market conditions are changing. By paying attention to the steepness of the Trend Line.

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