0We have three trends
UPTREND: An uptrend on a chart of any time frame is nothing but a series of higher highs and higher
lows.
DOWNTREND: A downtrend on a chart of any time frame is nothing but a series of lower highs and
lower lows.
SIDEWAYS TREND: A sideways trend is nothing but relatively equal highs and lows.
TRENDLINES
An UPTRENDLINE is nothing but a line that connects two or more LOWS, in a chart in an uptrend. The
more points that meet up to this line, the stronger this line is. This trendline acts as support, as prices
blast off, then pullback to this line before taking off again. Therefore, in an UPTRENDLINE, the 2nd point
is always higher than the 1st point, and the 3rd higher than the 2nd.
A DOWNTRENDLINE is nothing but a line that connects two or more highs in a downtrend. Once again,
the greater the number of points that connect, the stronger the line is. This downtrendline acts as
resistance. Each down move is followed by a pullback rally to this trendline which acts as resistance only
to be met with more selling and lower prices. In DOWNTRENDLINE, the 2nd point is always lower than
the 1st and the 3rd lower than the 2nd.
A break in the UPTRENDLINE signals a possible change in trend. So too with the break in the
DOWNTRENDLINE.
