How to Draw Trendlines the RIGHT Way

Anchor points, the touchpoint rule, and what makes a line valid or invalid.

This is where most beginners go wrong — and where getting it right makes the biggest difference.

The Golden Rule: Anchor to Wicks, Not Bodies (Usually)

A candlestick has two parts:

Body — the thick rectangular part showing opening and closing price
Wicks (or shadows) — the thin lines above and below showing the high and low of the period

For most trendlines, connect the wicks — the extreme highs and lows of the candles. Wicks represent the true boundaries of where buyers and sellers pushed price. Bodies represent where they settled.

Important: Some situations call for using candle bodies instead of wicks. The key is consistency — pick one approach and stick with it. Don't switch between wicks and bodies to make a trendline fit how you want it to look. That's called "fitting your bias," and it's a trap.

Step-by-Step: Drawing an Upward Trendline

Find the lowest point on your chart — the most significant low you can see. This is your Point A.
Find a higher low — a subsequent low where price dipped back down but not below your Point A. This is your Point B.
Critical rule for Point B: The trendline you draw between Point A and Point B must NOT have price passing through (intersecting) it anywhere in between. If price crosses the line before Point B, your Point B is invalid — find a different one.
Draw the Ray from Point A through Point B and let it extend to the right.
Count your touchpoints. A trendline with 2 points is the minimum. 3 or more touchpoints = a strong, reliable trendline.

Step-by-Step: Drawing a Downward Trendline

Find the highest point on your chart — the most significant high you can see. This is your Point A.
Find a lower high — a subsequent high where price rallied back up but not above your Point A. This is your Point B.
Same rule applies: the line between Point A and Point B must not be intersected by price anywhere in between.
Draw the Ray from Point A through Point B and extend it to the right.
Count your touchpoints. More = stronger.

The Touchpoint Rule

Touchpoints are the number of times price comes back to test a trendline. This is the single biggest indicator of how reliable a trendline is:

2 touchpoints — Minimum to draw the line. Valid, but weak.
3 touchpoints — Strong. This is your target.
4+ touchpoints — Very strong. High probability of continued respect.

Every time price comes back to a trendline and bounces off it without breaking through, that trendline gains credibility. It proves that the market is recognizing and reacting to that level.

What Makes a Trendline Invalid?

Price passes through the line before reaching your intended Point B
You moved the line to fit a preconceived idea about where price should go
Only one touchpoint — a single point is just a dot, not a trend
The line connects insignificant price moves rather than clear swing highs or lows

Visualizing It Correctly

Here's a mental model that helps: imagine your upward trendline is a floor. You're trying to draw the floor so that it props the price up perfectly from underneath — touching as many "footprints" (lows) as possible, without ever going above the price. If the floor pokes through the price at any point, it's in the wrong place.

For a downward trendline, reverse this: imagine it as a ceiling. It should press down on the highs from above without ever dipping below the price.

Next module: Top-Down Analysis →

Disclaimer: TrendlineFinder is an educational research and charting tool, not a financial advisor. Content is for educational purposes only and is not investment advice. Trading involves risk. © 2026 Wicked RC LLC. · Terms · Privacy · Financial Disclaimer