# Trend Lines
**Drawing Trend Lines**
A **trend line** is a crucial tool in technical analysis for understanding price movements. Let’s break it down:
1. **Definition**: A trend line is a straight line that connects two or more significant price points on a chart. These points can be either **highs** or **lows**.
2. **Purpose**:
* **Support and Resistance**: Trend lines help visualize **support** (lower boundary) and **resistance** (upper boundary) levels.
* **Historical Trends**: They reveal the historical trend of price movements.
Trend lines are a visual representation of support and resistance levels.
### Types of Trend Lines
There are two types of trendlines: ascending and descending.
**Ascending Trend Line (Uptrend)**:
* Connects **lows** where the most recent low price is higher than the previous low.
* Acts as a **support level** extending into the future.
* Positive slope indicates increasing demand (more buyers than sellers).
* As long as price remains above this line, we have a **bullish trend**.
**Descending Trend Line (Downtrend)**:
* Connects **highs** where the most recent high price is lower than the previous high.
* Acts as a **resistance level** extending into the future.
* Negative slope indicates increasing supply (more sellers than buyers).
* As long as price remains below this line, we have a **bearish trend**.
**Trend Line Breaks**:
* Price often bounces off trend lines.
* Sloped trend lines are typically retested multiple times before breaking.
* When a trendline is **broken**, especially with high volume, prices tend to move significantly **above** or **below** the broken trendline.
