Trends and Trend Lines

Learn to draw trend lines, identify price channels, and understand market structure, including uptrend, downtrend, and sideways trend.

Types of Trends

📈 Uptrend: • Series of higher highs and higher lows • Trend line drawn along the lows • "Trend is your friend": trade with the trend!

📉 Downtrend: • Series of lower highs and lower lows • Trend line drawn along the highs

↔️ Consolidation (sideways): • No clear direction • Price moves within a range • The market is in consolidation ~70% of the time!

Pro Tip: "Trend is your friend"

💡 Golden rule of trading:

"The trend is your friend until the end when it bends."

• In an uptrend: look for buying opportunities on pullbacks • In a downtrend: look for shorting opportunities on bounces • In consolidation: trade within the range or wait for a breakout

⚠️ Never try to "catch a falling knife": do not buy in a strong downtrend without confirmation of a reversal!