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Trendline

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Table of contents
    1. 0.2. How Trendlines Work
    2. 0.4. Why Trendlines Matter

A Trendline is a straight line drawn on a chart to connect significant price points, helping to visualize the direction and strength of a market trend.

How Trendlines Work

Trendlines are used in technical analysis to identify the prevailing market direction (uptrend, downtrend, or sideways). An uptrend line connects higher lows, while a downtrend line connects lower highs. They help traders spot potential entry or exit points based on price movements and the trend’s trajectory.

Why Trendlines Matter

Trendlines are essential for predicting future price movements and understanding market sentiment. They act as dynamic support or resistance levels, guiding traders in decision-making. Trendline analysis can provide early signals of trend reversals or continuation, making them a critical tool for technical traders.