The main utility for a trader using trend lines is to define a trend. If a trend

line is drawn by connecting any two points on a chart and the slope is to

the upside, this is indicative of a bullish trend line. If the price is above

a bullish trend line, the bias is, well, bullish. I did not say it was difficult.

That is not the point. The point is, “Is it effective?” Let’s look at a typical

example.

Figure 8.1 shows a bullish trend line. After the lows at points 1 and 2

are established, a bullish trend line can be drawn. The price moves steadily

higher with higher highs and higher lows. Near the 1.3101 area, the trend

begins to stall and the first major correction begins.