Summary Of Trend and Trendline

Notes To Remember:

The Trend of Market

The price has a zig-zag pattern of fluctuation on the price chart. The general direction of price graduation is named the "Trend of market".

Type of Market

Bullish Market: It refers to an uptrend, increasing-price progression where implant traders expect growth in market.
Bearish Market: It refers to a downtrend, decreasing-price progression and traders look pessimistically at the further price.

Types of Trends in The Market

Uptrend (the price fluctuates in an increasing direction)
Downtrend (the price fluctuates in decreasing direction)
Sideway trend ( when the price fluctuates among parallel support and resistance)

In technical analysis, identifying trends is a skill and can be easily reached by drawing trendlines.

To Draw an Uptrend Line:

Find at least three sequence swing low points on the price chart.
Choose from the toolbar and draw the line through the points.

To Draw a Downtrend Line:

Find at least three sequence swing high points on the price chart.
Choose from the toolbar and draw the line through the points.

Price channel

A Price Channel has been configured when both the lower and upper trendline is drowned and price swings between two trendlines. While the upper trendline is equivalent to resistance, and the lower trendline acts as a support level.
The Price Channel ...

indicates ideal entry or exit points on the chart (the potential trading opportunity).
efficiently identifies the breakout when security price breaches either the upper or lower boundaries

Types Of Price Channel

Descending Channel (Bearish Channel)
Ascending Channel (Bullish Channel)
Horizontal Channel

To Draw Price Channel:

Draw the main trendline
Draw the second trendline

Frequently Asked Questions

A trendline is a line drawn on the price chart and connects the highest or lowest swing points of the price, which generally indicate the direction of the market.

Price never moves in a straight line and has a zig-zag movement pattern. The general direction of this zig-zag pattern is known as the market trend. It can be customized in three types: Uptrend, downtrend and sideway trend.

Technical analysis uses trendlines to identify trends. The trendline is straight lines that connect a series of swing high or swing low points on the price chart. Swing high points are used for downtrends and swing low ones for uptrends.

To draw an uptrend, just look for a positive slope (increasing) of price graduation and draw a line through low swing points. At least three low points are enough to draw a valid uptrend line. Since low swing points are placed at the bottom of the price zig-zag pattern, the trendline is drowned lower than the price chart.

To draw a downtrend, just look for a negative slope (decreasing) of price graduation and draw a line through high swing points. At least three high points are enough to draw a valid downtrend line. Since high swing points are placed at the top of the price zig-zag pattern, the trendline is drowned above the price chart.

It is simple and easy, just need to draw support and resistance levels. The sideways trend is configured between horizontal trendline which has commonly known as support and resistance.

When a pair of trendlines are drawn and form an upper and lower bound for the price, that swings among them, is known as a price channel. The upper trendline is equivalent to resistance, and the lower trendline acts as a support level.

It is only required to draw a pair of trendlines: the upper and lower ones. Not necessarily being parallel.

A bullish channel is formed when price swings in an uptrend between two trendlines.

A bearish channel is formed when price swings in a downtrend between two trendlines.