Step by step
How to read it
- 1The first low.
- 2A higher low — two points draw the line.
- 3A third touch makes it a line others watch.
- 4A close below it: the break.
Watch out
Common mistake
Forcing the line through bodies and wicks until it fits. If it needs forcing, the market is not respecting it.
In one line
Definition
A line through the higher lows of an uptrend (or the lower highs of a downtrend). A close beyond it is the break.
Check yourself
Check yourself
How many touches make a trend line most traders watch?