If the lows or peaks seen by the price that is on its way can be combined with a straight line, it becomes a trendline.
What separates the trendline from support or resistance is having a slope. Therefore, we can also call trendlines supports or resistances that have a slope.
As a matter of principle, the increasing trendline is drawn by combining the lows, and the decreasing trendline is drawn by combining the peaks. For example, if the lows are connected in a decreasing way, this can’t be accepted as an accurate drawing. Similarly, the peaks cannot be connected increasingly.
Fundamentally, it is expected the price that touches the price channels will come back. That is why after an accurate drawing, it gives an opportunity to buy for the price that touches the increasing trendline and an opportunity to sell for the price that touches the decreasing trendline.
In case the price crosses the trendline, placing a stop-loss order outside the trendline is recommended to limit the risk.
It is believed that the prices that cross the trendlines also have opportunities. According to this, the price that breaks the decreasing trendline upwards provides an opportunity to buy, and the price that breaks the increasing trendline downwards provides an opportunity to sell. And that is because just like in the support and resistance, it is believed that the price that breaks all these levels will continue in the same way for a while. That’s why when the increasing trendline breaks, the buying positions are located.
In these positions, as the stopping loss points, the stop the loss orders are positioned when it returns to the trendline since the price breaking the trendlines may go back into the line. These are generally called bear and bull traps and may be possible from time to time. This is why stopping loss points should never be missed.
Below are some examples of decreasing and increasing trendlines.