2019-07-04

Declining Trend Line

The trend line is the most basic technique in graphical analysis. It is the straight line between the highest point of each wave top on the data track graph or the lowest point of each valley bottom.


In the downtrend, the two high points are connected into a straight line, and the downtrend line is obtained.


Here are a few things to keep in mind about the trend line:


1. At least two tops or bottoms are needed to draw a valid trend line, but a third point is needed to determine the trend line.


2. The steeper the trend line drawn, the lower its reliability, and the greater the chance that it will be broken.


3. As with the horizontal support and resistance level, the more times the trend line is tested, the stronger the role of support or resistance.


4. The most important thing is to never force the trend line drawn to adapt to the market. If they are not suitable for market trends, then this trend line is invalid.


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