Trend line is one of the simplest and most valuable basic technical tools used by chart analysts. The uptrend line is a straight line connected along the low point of the continuous uptrend, which is located at the lower side of the corresponding price chart. The downtrend line is connected along the continuous uptrend point and located on the upper side of the price.

Trend line method

Based on the low point of decline or the high point of rise;

Two adjacent base points are connected into a line, and the third base point is used for verification;

Make the nearest base point fall on or near a straight line as much as possible.

K-line price range is on one side of the trend line;

First, there must be evidence that there is a trend. In other words, in order to draw an upward trend line, we need at least two effective upward rebound lows, and the latter is higher than the former. A tentative upward trend line can be drawn through two points.

Secondly, the above is only a "tentative" trend line. In order to verify its effectiveness, we must see the price hit the line for the third time and rebound from the line again. To sum up, to make a trend line, we must first have two points, and then use the third point to verify its effectiveness.

Finally, it is worth noting that the K-line price range should be on the side of the trend line, and the recent base point should be above or near the line as much as possible. When making a trend line on a line chart, draw it below or above the whole price range. Some chart dividing lines like to use closing price as trend line, which is not standard. Although the closing price may indeed be the most important of all the prices in the whole day, it can only represent a fragment of the whole day's price activities. The whole price range of the day includes all the price changes of the day, which should be more meaningful.

The basic view of the concept of trend is that the next step of a given trend is often to develop with the trend. It can be inferred that once a trend has a certain slope or evolution rate indicated by its trend line, it will usually continue to maintain the same slope. So the trend line can not only determine the limit position of the price in the market adjustment stage, but more importantly, it can show under what circumstances the original trend has changed.

For example, in the upward trend, it is inevitable to adjust the decline, but it often only touches or is very close to the corresponding upward trend line. Because the purpose of futures traders is to buy in the rising trend, the support boundary provided by the trend line below the market can be used as the buying area. The downtrend line can be used as a blocking area to achieve the purpose of selling.

As long as the trend line is not broken, we can use it to determine the buying or selling area. But if the trend line is broken, it will send a signal that the trend is changing, asking us to close all positions established in the original trend direction. The breakthrough of trend line is often the best early warning signal of trend change.

1, the longer the trend line is not touched, the more important it is;

2. The more times the trendline is tested (especially recently), the more important it is.

For example, if a trend line has successfully experienced eight trials, thus showing its effectiveness for eight consecutive times, then it is obviously more important than another trend line that has only experienced three trials. On the other hand, a trend line that lasts for 9 months is of course more important than another trend line with a history of only 9 weeks or even 9 days. The more important the trend line is, the greater the confidence it inspires, and the more important its breakthrough is.