After we get familiar with the four elements is time to understand the trend lines. If we look every element separately we have limited information about past and future price movement. We can take information of the four elements and step forward in analysis. Next step is trend line.
Trend lines are probably the most common form of technical analysis. We need at least two tops or bottoms to draw a valid trend line but it takes three to confirm a trend line.
In the uptrend, trend line is drawn through the lowest swing-points ( lows) of the price movement.
Connecting at least two lowest lows(or support level) will create a trend line. Here is an example of uptrend trend line:
In the down trend, trend line is drawn through the highest swing-points (peaks) of the price move.
Connecting at least two highest peaks( or resistance level) will create a trend line. Here is an example of downtrend trend line:
A trend line confirms its validity when the price respects this line. trend lines become stronger the more times they are tested, Here is an example of valid trend line: