#趋势线 Technical analysis involves connecting the key high and low points of price trends to form lines, with the core purpose of identifying trend direction and determining support/resistance levels, aiding trading decisions (especially suitable for cryptocurrency, stocks, and K-line analysis).
Core classifications (3 core types covering mainstream scenarios)
1. Upward trend line: Connects two or more consecutive "low points that gradually rise"; the area above the line is the price operating range, and the line itself is a key support level (likely to rebound after price retracement touches it).
2. Downward trend line: Connects two or more consecutive "high points that gradually decrease"; the area below the line is the price operating range, and the line itself is a key resistance level (likely to fall back after price rebound touches it).
3. Horizontal trend line: Connects two or more consecutive "high and low points that are flat"; forms a sideways consolidation range, with the upper line as resistance and the lower line as support (price breakthroughs/breakdowns may initiate a new trend).
Key usage of cryptocurrency trading (extremely simple and practical)
- Core drawing method: At least connect two valid high and low points (three or more for greater accuracy), and try to have more price points close to the trend line, avoiding excessive fitting to extreme market conditions (such as pin bar K-lines).
- Trading signals: In an upward trend, if the price retraces to the trend line without breaking below, consider buying low; in a downward trend, if the price rebounds to the trend line without breaking above, consider selling high; after breaking/breaking below the trend line, confirmation with trading volume is required (a significant breakout is more effective).