Trendline
A trendline connects swing points to map the current trend, acting as dynamic support or resistance.
A trendline connects swing points and maps the trend, acting as dynamic support or resistance. The more touches it survives, the more meaningful it is; a decisive break warns the trend is ending.
A trendline is a straight line drawn through consecutive swing highs or lows to map the direction and slope of a trend. In an uptrend, the line under the rising lows acts as dynamic support; in a downtrend, the line over the falling highs acts as dynamic resistance. The more times price touches a trendline without breaking it, the more meaningful it is. A decisive break of the trendline is one of the earliest warnings that the trend is ending.
How It Works
- Uptrend: line under rising lows
- Downtrend: line over falling highs
- Validity grows with the number of touches
Trading Tips
Draw trendlines on the timeframe you trade, through actual swing points
A close beyond the trendline matters more than a wick through it
Steep trendlines break faster than shallow ones - steepness is a warning
Trendline Example
Say a line under three rising EUR/USD lows holds a fourth touch that bounces 80 pips. Each touch added believers and resting orders, which is why the fourth bounce was the cleanest: the line got stronger with witnesses.
How Traders Use Trendline
Draw lines through wicks on clear swings and demand three touches before trusting one. Trade the third touch and beyond with stops behind the line. Breaks need a close plus retest, not a wick poke.
Related Terms
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