Trendlines and Market Structure

A trend is not an opinion. It is a sequence of highs and lows, and it ends on a specific candle you can point at.

6 min read · Updated 2 Sep 2026

Two touches draw a line; the third confirms it. The fourth often breaks it.

Most people draw a trendline to justify what they already believe. Drawn properly it does the opposite — it gives you a line the market has to defend, and tells you plainly when it stopped defending it.

Drawing one that is worth drawing

1 Use two swing points
In an uptrend connect two rising swing lows; in a downtrend two falling swing highs.
2 Wait for the third touch
Two points make any line. The third touch is the market agreeing with you.
3 Use bodies, not wicks, when they conflict
Wicks are where price was rejected; closes are where it agreed.
4 Redraw as it ages
A steep line that has been broken once is not the trend any more — the market has told you the slope changed.

Market structure — the version that does not need a line

Higher highs, higher lows, then failure

A trend is intact until a higher low fails.

Structure is trend without drawing anything. An uptrend is higher highs and higher lows. It stays an uptrend until a higher low fails — price closes below the last swing low. That is a break of structure, and it is the only objective end to a trend.

This is why "the trend looks weak" is not a reason to sell, and "price closed below the last higher low" is.

When it fails

In a sideways market structure gives false signal after false signal — every push breaks a level, then reverses. Trendlines are worse: on a range you can draw four plausible lines and all of them break.

Structure works in trends. If you cannot point at a clear sequence of highs and lows, the tool is telling you it does not apply here.