Levels and zones
Trendlines and channels
A sloped line through swing lows or highs, and a second parallel line that forms a channel.
Practitioner rule, no published test found
Widely taught. The Exchange can test it on public price history and will say what it finds.
No published test of hand-drawn trendlines was found.
What it is
Two swing points give a line and a third touch tests it. The same points can support several lines, so a line is a judgment. Steeper lines break more often.
What it suggests
A sloped level is a moving support or resistance. A break says the pace of the trend changed.
How to check it
Draw on the four-hour or daily chart, use clear swing points, and expect to redraw after a break.
Common mistakes
- Forcing a line through points that do not fit.
Related lessons
Written in our own words. Education only, not financial advice.