How to know trends

The basis for drawing trend lines onto charts is probably one of the most basic to do and master, yet it is one of the more powerful and reliable indicators used to determine a change in trend.

Trend lines can be applied to many different indicators but for the reference of this article we will use closing price data. This is the most common data used.
We will discuss the other uses at a latter stage.

Use the list below to navigate or simply scroll down,

1.What are trend lines and how to draw them !
2.Support lines.
3.Resistance lines
4.What to look for / Breakout's

When viewing most charts a pattern of the price formation is usually visible to the naked eye. This pattern is called a trend and these trends have three distinct patterns.


Up trend


UP TREND : Prices increasing








A down trend with trend line drawn in


DOWNTREND: Prices decreasing









Holding pattern with BOTH lines drawn in

Note Rising volumes on lead up to Breakout









HOLDING or FLAT LINE : Prices stagnant or small trading range

Draw a line connecting the lowest points on a chart in an up trend.
Draw a line connecting the highest points on a chart in a down trend.
Draw a line c Draw BOTH highs and lows for a holding pattern