The basic function of the trendline - is to help you highlight resistance and support on your charts.

When the price chart runs, it means creating different highs and lows. However, if you look wide, these highs and lows are trending up or down. From there you will identify the trend line easily. The bull market will tend to create a support line that also gradually increases.

As you can see in the figure, all periods of price reversal have failed to cross this trend line. (Circle 4 points). It follows that you can use this trendline to predict the next reversal point in the market. The opposite is also possible, draw trendline resistance, and accurately capture a downside reversal when the price hits the trend line.

In the figure below, you can easily see that the resistance trend ended at the upper trend line and reversed going down. Through the two pictures above, you have clearer the purpose of the trend line. Trend lines help you identify support and resistance zones.

What happens when the trend line is broken? When the trend line is broken, it will be more difficult to analyze, but the market always creates new support and resistance points. The figure below is an example of a resistance-forming trendline being broken and becoming a trend line creating support. When the market goes down it pushes prices up again.

What is presented in this article are the basic functions of the trend line. Of course, we can do more with the trendline. Please read the following articles to learn how to use the trend line better (will be updated later)

  • How to treat when the trend line is broken
  • The classic trend break
  • Examples of signal reversal at lines are plotted
  • Structures made (good and bad)

Summary of the trend line

When the market moves up and down, it creates points of support and resistance at many different price levels. From there you can identify trend lines and build a trading strategy based on those trend lines

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