What are Trendlines?

What are Trendlines

Trendline is a graphical representation tool to show the direction of market prices with the help of drawing lines on the chart. It is a part of basic technical analysis and very important for the beginners to learn. The trendlines form a trend in the market based on the ups and downs of the prices. With the help of a trendline one can predict in what direction the prices are moving in the forex market which in turn helps a trader to decide when or where to place the order to gain maximum profit or avoid potential loss. Drawing a trendline is easy, one should look for two tops or bottoms on the prices chart and connect them, it’s better if there are three tops or bottoms to connect as this indicates that the trend is confirmed. However, one should not force the trendlines to form a trend, just locate the trend the prices themselves are showing.

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