Level 4 · Lesson 6 of 16 · 6 min read
Drawing Trend Lines
The simplest tool. The most misused tool. Learn to draw them correctly.
Researched and written by Laurent Why Trend Lines Work
A trend line is a visual representation of momentum. It shows you the rate at which buyers are willing to buy (uptrend line) or sellers are willing to sell (downtrend line). When price touches this line and bounces, it confirms the trend. When it breaks and closes through, the trend's pace has changed.
Drawing an Uptrend Line
Connect the swing lows (the valleys, not the peaks). Each low should be higher than the one before it. That's an uptrend.
Drawing a Downtrend Line
Connect the swing highs (the peaks, not the valleys). Each high should be lower than the one before it. That's a downtrend.
How to Validate a Trend Line Break
Many beginners sell every time price wicks through an uptrend line, only to watch it snap back. A real break requires:
- A candle that closes beyond the trend line (not just wicks through).
- Ideally, a second candle that opens on the new side and continues moving away.
- Or, a retest of the broken trend line from the other side (old support becoming resistance).
Don't force it. If you have to contort your trend line to connect the points (skipping obvious highs/lows), it's not a valid trend line. Good trend lines usually look obvious when you step back. If you're using a ruler to force a fit, the line isn't real.
Key Takeaways
- • An uptrend line connects two or more higher lows. It shows the pace of buying.
- • A downtrend line connects two or more lower highs. It shows the pace of selling.
- • You need at least 2 points to draw a line, but 3 or more points validates it.
- • A trend line is broken when a candle closes convincingly on the other side, not just wicks through.