Trendline
What is a trendline, and why do traders using the same chart often draw different ones?
In plain words
A trendline is a straight line drawn through successive lows in an uptrend, or successive highs in a downtrend, summarising the direction and pace of a move. It needs at least two chosen points; since markets rarely give exact ones, placement depends on which highs or lows the drawer treats as meaningful.
Why it matters
The line acts as a reference for judging whether a move is holding or breaking. Since a steeper or shallower line changes where a 'break' is said to occur, two people watching the same chart can reach opposite conclusions at the same price. The line summarises what already happened; it is drawn from the market, not imposed on it.
In a real week: ETH, week of 7 July 2025
In the week of 7 July 2025, ETH rose 15.63%, from an open of 2570.35 to a close of 2972.03, with a range of 21.03%. The low of 2512.0 formed on Monday at 16:00 UTC, and the high of 3040.15 followed on Friday at 09:00 UTC. One drawer might connect the Monday low to the Friday high, a line rising over the week. Another might read the week's daily path, where Monday was the worst day at -1.09% and Thursday the best at 6.59%, and draw a steeper line. The same price sits above one line, nearer the other.
A common mistake
Treating a trendline break as a fact of the chart. The break depends on where the line was placed, so the same price can be a break of one line and still inside another.