What is Trendline?
Trend chizig'i
In short
A line connecting a trend's lows (or highs). Two parallel lines form a trend channel.
Also known as: channel, kanal
A trendline is a straight line connecting a trend's lows (in an uptrend) or highs (in a downtrend). It shows the slope of the trend and where price is being "supported". Unlike horizontal levels, a trendline is sloped — its price changes over time.
How to draw it
- In an uptrend: connect at least two rising lows.
- In a downtrend: connect at least two falling highs.
- A third touch confirms the line — any two points can be joined by a line.
Drawing a second, parallel line on the opposite side creates a trend channel: price moves between the two lines.
How it is used
- When price approaches the line — a chance to enter in the trend's direction, with the stop beyond the line.
- When the line breaks on a close — a warning that the trend is weakening (but not yet a reversal).
- Channel boundaries — targets and places to take partial profit.
Limitations
Trendlines are subjective: different traders draw them differently (through wicks or through bodies). Very steep lines break quickly. And after a break, price often continues the trend at a new, gentler slope. That is why trendlines work best alongside horizontal support and high/low analysis.
The lower line connects the lows ($100 → $103 → $106 → $109), the upper line the highs ($105.50 → $108.50 → $111.50); the channel is about $4 wide. Buy near the lower line, take some profit near the upper line.
Example
Illustrative case: an uptrend on the daily chart, with lows at:
- Week 1: $20,
- Week 4: $22,
- Week 7: $24.
All three sit on one line rising $2 every 3 weeks. So by week 10 the line should be around $24 + $2 = $26.
If in week 10 price dips to $26.30 and bounces, the line is confirmed again (a fourth touch). If price closes at $25, clearly below the line, that is a warning that the trend is slowing — but for the trend to end, the last low ($24) also needs to break.
Mistakes and tips
Don't force a line to fit — if drawing it means ignoring many candles, it isn't reliable.
Draw consistently: always through wicks or always through bodies.
Don't flip to the opposite position the moment a line breaks — price often just moves sideways.
Frequently asked questions
- How many points do you need to draw a trendline?
- Two points are enough to draw it, but a line is considered reliable only after at least a third touch.
- Is the trend over if the trendline breaks?
- Not necessarily. It is a sign the trend is slowing; a break in the sequence of highs and lows is a better signal that the trend has ended.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
- Trend: swimming with the currentHH/HL structure, trendlines and channels, the 20/50/200-day averages, buying pullbacks and the signs that a trend is ending.Open lesson · 11 min
- WedgesRising and falling wedges as reversal and continuation patterns, how they differ from triangles and channels, breakout direction, targets and mistakes.Open lesson · 11 min
Try the theory without risk
Open a free account: demo trading with a $10,000 virtual balance, a trading journal, calculators and a step-by-step course.