Price Action · Classical · 1920s–30s · Any timeframe
A diagonal line drawn through a series of rising lows (or falling highs) to map the slope of a trend. It's usually one of the first tools any trader learns: no indicator, no calculation — just geometry applied to a chart, and a clear line in the sand for when a trend is in trouble.
An uptrend line is drawn under a series of higher lows; a downtrend line across a series of lower highs. Two points are enough to draw one, but most traders treat it as validated only once price respects it a third time. From there the line does two jobs: pullbacks to it become potential continuation entries, and a decisive close through it is read as an early warning that the trend is losing strength.
Price reacts off a low. On its own this is just one point on the chart — not yet a line.
Price rallies, pulls back, and touches a higher low again. Two points now let you draw an ascending trendline through them.
Price rallies again and returns to test the same line — and holds again. Three touches is what turns a trendline from a guess into a level traders actually watch.
Price finally fails to hold the line and closes clearly below it. A trendline break like this is one of the most widely watched signals in price-action trading, though it works far better alongside other confirmation than alone.
Illustrative example only — not real market data.
The chart above shows a textbook case: three touches of an ascending line, each one holding, then a weaker rally and a decisive close below the line. The trendline itself proves nothing on its own — what matters is what the market does when it gets there, and a break means far more after several prior touches than after just one.