In technical analysis, ‘Trend Lines’ are used for ‘trend’ identification and confirmation. A trend line can be understood as a straight line formed by connecting two or more price points. Traders draw these lines on charts for connecting a series of prices together or for confirming certain data points. These lines can be then extended into the future, for validating a line of ‘support or resistance’. Trendlines are easily recognizable and give the trader an indication of price movements and directions. They also show the speed of price and price changes, patterns and price contractions. Identification of ‘trend’ is a key feature in Technical analysis and thus the study of trendlines becomes important for analysts/chartists.
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