Trending - Looking at a chart gives us a good impression about price movements.

The most important, and maybe the only goal for technical analysis is to determine whether or not the market is trending or trading, and to predict these specific movements.

When the price changes in a side ways direction then the price is in a trading range.

There are different formations when a security is in a trading range.

The easiest one to recorgnise is a side ways movement.

When a market is trending it can go in two directions, up or down.

When it trends up we see higher highs and higher lows.

By connecting the lows we see a trend line that is rising.

The trend line here works as a support line.

Each time the price falls to the trend line it goes back up again because invertors start buying.

When the market trends down we can observe lower highs and lower lows.

By connecting the highs we create a declining trend line.

This acts like a resistance line. Each time the price reaches the trend line it changes it's direction and goes down.

The only difference between trend lines and support and resistance are that trend lines represent constant change of price in one or other direction.

To draw trend lines we need at least two pivot tops and two pivot bottoms at least five bars or candles apart.