How to

Identify and Draw

Trendlines on your Charts

A Trend in the stock market  is the pattern of a stock to move in a particular direction.  The best way to understand how the market fluctuates is to study trends.  Keeping track of upswings and downswings of the stock market helps investors decide where to enter and exit their positions.

Day Traders have come up with many different ways to identify a trend. Some look at how moving averages are forming, others look at technical indicators that have been specifically created to identify trends and others–like myself–prefer to look directly at the price action on a chart.

What are the different types of trends?

• A stock is in an up trend when the price is making a series of higher highs and higher lows.
• A stock is in a down trend when the price is making a series of lower highs and lower lows.
• A stock is in a sideways trend when the price is making neither a series of higher or lower highs nor a series of higher or lower lows.

Watch the video below to learn simple methods that can be used to draw any trend line in any market: