Drawing Trendlines That Mean Something
How to draw lines the market actually respects, not lines that fit your hope.
A trendline is a straight line connecting a series of highs or lows, drawn to visualise the trendThe prevailing direction of price: up, down or sideways.’s slope and to flag where it might be tested. Done well, it’s a useful guide; done badly, it’s just a line that flatters your bias.
- UptrendThe prevailing direction of price: up, down or sideways. line — drawn under the higher lows, acting as a rising supportPrice zones where buying (support) or selling (resistance) tends to dominate. level the price keeps bouncing off.
- DowntrendThe prevailing direction of price: up, down or sideways. line — drawn over the lower highs, acting as a falling resistancePrice zones where buying (support) or selling (resistance) tends to dominate. level that keeps capping rallies.
- Validity — a line needs at least two points to draw and a third touch to confirm it’s real; the more times price respects it, the more significant it is.
The honest test of a trendline is simple: did you draw it to describe what the market is doing, or to confirm what you hope it willArranging how your wealth passes on after death. do? It’s tempting to tilt the line, ignore the candleA chart bar showing a period’s open, high, low and close. that pokes through, or cherry-pick points until it “works.” A real trendline connects obvious swing points with minimal force-fitting, and the market visibly respects it (multiple clean touches). If you have to squint and bend it, it isn’t there.
Common mistakeForcing a line through the data — adjusting the angle, using wicks vs bodies selectively, or cutting through candles — until it fits a trade you already want to take. That’s drawing your bias, not the trendThe prevailing direction of price: up, down or sideways.. If a line needs constant redrawing to stay valid, the trendThe prevailing direction of price: up, down or sideways. it claimed to show is probably broken.
ExampleIn an uptrendThe prevailing direction of price: up, down or sideways. a stock bounces off a rising line at ₹150, then ₹165, then ₹182 — three clean touches. That line is real and worth watching: a decisive break below it warns the uptrendThe prevailing direction of price: up, down or sideways.’s slope has failed.
Key takeawayTrendlines connect higher lows (supportPrice zones where buying (support) or selling (resistance) tends to dominate.) or lower highs (resistancePrice zones where buying (support) or selling (resistance) tends to dominate.); a third clean touch confirms one. Draw them to describe the market, not to flatter a bias — a real line is respected with minimal force-fitting.
FAQs
Should I draw trendlines using wicks or candle bodies?
Both approaches are used; pick one and stay consistent. Bodies (closes) filter out intraday noise and many traders prefer them; wicks capture the true extremes. Consistency matters more than the choice — switching whenever it suits the trade is just bias in disguise.