How to Draw a Trend Line

Michael Whitman · Trading since 2017, full-time since 2020 · Reviewed 2026-09-07

A trend line is the easiest thing on a chart to draw and the easiest to draw dishonestly. The difference between the two is entirely in the rules you set before you start.

Before you start

A decision about wicks or bodies, made once and never changed. Wicks capture the extremes; bodies capture where periods settled. Both are defensible. Switching between them is not.

Two swing points you did not choose for their convenience. Actual turning points, identified mechanically, not the two that produce the most satisfying line.

A rule for when the line is deleted rather than redrawn. Written in advance, because after a break there is always a version of the line that still works.

The steps

1. Connect two swing points of the same kind

Two lows for an ascending line, two highs for a descending one. Two points define a line and prove nothing — any two points do.

2. Use lows in an uptrend and highs in a downtrend

The line sits under a rising market and over a falling one. Drawing it on the wrong side produces a line price is nowhere near.

3. Apply your wicks-or-bodies decision consistently

Whichever you chose, use it on every line on every chart. Switching per line is how a trend line becomes unfalsifiable.

4. Check the angle before trusting it

A steep line requires an accelerating market to hold. Markets rarely accelerate for long, so a steep line has a short expected life regardless of how well it has held.

5. Wait for the third touch

The third is the first piece of evidence the line describes anything. Further touches mean more participants are watching it, which is a different claim from the line being stronger.

6. Give the line width

A band roughly a typical bar wide. A one-pixel line will be crossed by ordinary movement, which means it cannot be tested.

7. Delete rather than adjust

If price closes clearly through it, the line is finished. Draw a new one from new points if the structure supports it, and do not move the old one.

8. Check participation on the break

A line broken on very little volume is price drifting through an area nobody was defending.

How to tell it worked

Mark up 20 sessions with the right-hand edge covered, spread over at least 60 days of history.

Count how many lines you would draw identically with the future visible. 20 out of 20 means the anchor rule is mechanical. Any line you would move is one where the outcome chose the points, which is the failure this exercise exists to find.

Count how many of your lines reached a third touch. Lines that never get one were never tested, and if most of your chart is untested lines, the chart is a set of guesses drawn confidently.

Then count the lines you deleted after a break versus the ones you redrew. Redrawing more often than deleting means the rule from the prerequisites is not being applied at the only moment it matters.

Why steepness is measurable rather than aesthetic

A line’s angle is a claim about the rate of advance continuing. A steep line asserts the market will keep rising at that rate, which is a stronger claim than a shallow one and correspondingly less likely to hold.

The measured texture supports the caution. On the shared price series, direction runs average 2.01 bars with the longest at 11, and the efficiency ratio has a median of 0.34 — sustained directional movement is the exception rather than the rule.

Which is why a very steep line breaking is not informative. It was going to break; the break says little beyond the fact that the market stopped accelerating.

The original data

Of the 24,971 unique videos in research/search-study-corpus.jsonl, 15 have an instruction-shaped title mentioning trend lines, at a median of 17,865 views across 15 channels, with a maximum of 563,308. Support and resistance, the related subject, appears in 41 at a median of 51,611. The counts come from site/rank_howto.py.

Fifteen videos from fifteen separate channels is one each, which is an unusually flat distribution and suggests a subject people cover once as a fundamental rather than return to. At 17,865 median it is well attended for a topic nobody specialises in.

The answer to the question on that chart is that the close through the line is not the trade. The line was a description of a rate of advance, and its break says that rate has ended — not that the direction has. A market can stop rising at one angle and continue rising at a shallower one, which is why the honest response is to delete the line and look at the structure underneath it.

When it fails

In a range you can draw a legitimate trend line in either direction, and both will hold for a while. Connect two of the lows and you have an ascending line; connect two of the highs and you have a descending one. Both are technically correct, both get touched, and they point at opposite conclusions. That is not a flaw in your drawing — it is the tool being applied where there is no trend for it to describe, and it is why step two starts by asking which trend you are in.

The second failure is a gap across the line. No trading happened at it, so nothing was tested.

A third is switching between wicks and bodies. It guarantees a line that always fits.

A fourth is trading a line with only two touches. It has not been tested once.

A fifth is a line with no width. Ordinary noise crosses it, so the break means nothing.

And a sixth is keeping a broken line on the chart. It becomes an explanation rather than a test.

Related

Trend lines covers what the line represents and the case for and against it. Support and resistance is the horizontal version, which is easier to test. And breakout is what a line break is usually being traded as.

This page is educational, not financial advice. Test every idea on your own charts before risking money.