trend line A line drawn at historical price levels that predicts the general direction the marking is heading and provides an indication of support/resistance.
Drawing trend lines is a very subjective matter. The best test of whether a trend line is valid is usually if it looks like a good line. In an uptrend, the trend line should connect the relative lows of the chart. A line connecting lows with a long-term rally becomes a support line that can provide a bottom for a partial retracement. A downtrend line connecting relative highs on a chart similarly acts as resistance to a shorter uptrend.
Since any two relative highs or lows are on the same line, you can draw an interim trend line between any two points. Traders can use the interim trend line as an indication of where support or resistance is, but until the interim line holds as support or resistance it is not yet confirmed as valid. .
Of course, the more times the trendline holds, the stronger it will be in the future. If a single line can connect 4 or 5 relative lows, the next pullback is more likely to bounce off the line.
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