Trendlines and channels

What it is

A trendline joins two or more swing lows in an uptrend (or highs in a downtrend). A channel adds a parallel line on the other side, so price moves between the two.

Lines with many touches attract orders, which is also why they're often swept (see Liquidity).

How to spot it

• Use clear swing points, at least two to draw and a third to confirm.
• Draw on candle bodies or wicks, but stay consistent.

How to use it

• Look for entries at the trendline in the trend's direction, ideally where it meets a zone.
• A clean close through the line is an early warning that the trend may be changing.

Common mistakes

• Redrawing the line every time price breaks it.
• Treating a trendline as exact; it's an area.

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