Trendlines & Channels

How to draw a trendline that actually means something, how parallel lines form a channel, and what a break of the line can tell you.

Connecting the dots

A trendline is a straight line drawn along the lows of an uptrend or the highs of a downtrend. It turns a messy series of swings into a simple picture of direction and speed. In an uptrend, the line acts like a rising floor that buyers keep defending. In a downtrend, it acts like a falling ceiling.

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