Which points does an uptrend line go through?

Through the pullback lows, the HLs. An uptrend line sits under price and rests on the pullback lows. Through the highs you draw a downtrend line or the top of a channel.

Leo’s line touches two lows but runs through the bodies of three candles. What’s wrong?

It cuts through bodies: price moved freely there, so there’s no line. A good line may touch a wick but doesn’t pass through bodies. Otherwise it’s curve-fitting.

Price closed below the uptrend line. What does it mean?

The trend is weakening; a break of the last HL would confirm a reversal. A line break is an early signal, not a verdict. A range often follows. Structure confirms a reversal: an LH and a broken HL.

Trendlines and channels

Lesson 7 of 23 in the course “Technical Analysis”. Free, with animations and a quiz.

The line that holds the trend

A trendline is a sloped level. In an uptrend you draw it through the pullback lows. Two points are enough to draw it, and a third touch shows the market sees it. In TradingView it’s the Trend Line tool, Alt+T.

How to draw it honestly

The most common mistake is bending a line to touch the points you want and cutting through candle bodies with it. A line may touch a wick, but if it runs through bodies, price moved freely there and the line isn’t really there. And remember: a very steep line breaks fast, a gentler one lasts longer.

The channel

Draw a parallel line through the highs and you get a channel. Price moves inside like a ball in a corridor. Look for buys at the bottom of the channel with the trend, take profit near the top edge. If price stops reaching the top edge, the trend is weakening: that’s an early warning.

When the line breaks

A close below the trendline is a sign buyers are tired. But it’s not a reversal yet: price often just goes sideways. Confirmation is the break of the last HL. Now in the trainer you’ll draw a line through the lows and through the highs yourself, and it’ll check that you’re not cutting candles.

Check yourself

Which points does an uptrend line go through?
Correct answer: Through the pullback lows, the HLs. An uptrend line sits under price and rests on the pullback lows. Through the highs you draw a downtrend line or the top of a channel.
Leo’s line touches two lows but runs through the bodies of three candles. What’s wrong?
Correct answer: It cuts through bodies: price moved freely there, so there’s no line. A good line may touch a wick but doesn’t pass through bodies. Otherwise it’s curve-fitting.
Price closed below the uptrend line. What does it mean?
Correct answer: The trend is weakening; a break of the last HL would confirm a reversal. A line break is an early signal, not a verdict. A range often follows. Structure confirms a reversal: an LH and a broken HL.

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