The main idea behind drawing trend lines is to visualize certain aspects of the price action. This way, traders can utilize trend lines as a tool. They’re the lines on a chart that connect certain data points. Typically, this information is the price, but this is not always the case. On technical indicators and oscillators, some traders may create trend lines.
Some traders may only use trend lines to get a better understanding of the market structure. Others may use them to create actionable trade ideas based on how the trend lines interact with the price.
Trend lines can be applied to a chart showing virtually any time frame. However, as with any other market analysis tool, trend lines on higher time frames tend to be more reliable than trend lines on lower time frames. Another aspect to consider here is the strength of a trend line. The conventional definition of a trend line defines that it has to touch the price at least two or three times to become valid. Typically, the more times the price has touched (tested) a trend line, the more reliable it may be considered.
