Trading & Technical Analysis

What is a trend line and how do you draw one?

A trend line is a straight line drawn on a price chart that connects a series of highs or lows to show the direction and slope of a trend. To draw one, you join at least two significant lows for an uptrend, or two significant highs for a downtrend, then extend the line forward. For example, connecting two rising lows on a daily chart gives an upward trend line that traders watch as a reference level. The more times price touches the line without breaking it, the more meaningful many traders consider it, though a trend line is a visual guide rather than a precise rule.