Trend Line

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Adding Trend Lines

The Trend Line tool makes it easy for you to draw trend lines on charts. A trend line is a line drawn along the tops or bottoms of prices in the direction of the prevailing trend.

In the case of an up trend, the trend line should connect three or more lows and be drawn beneath the price action, whereas, in a down trending market, the trend line should connect three or more highs and be drawn above the price action.

Resistance lines may be used as an entry indicator for a security that is currently in a decline. Once the security breaks above the trend line a buy signal is generated. Generally, a trader will stay in a position so long as the price action remains above the trend line and look to exit the position when it breaks below that trend line.