Drawing Sideways Trend Lines

Wait for a New Low or High

Upward Movement and New High

The second requirement for a sideways trend line is that the prices move away from the high or low reversal, and make a new low or high. The new low or high will not be part of the actual trend line, but it is necessary to define the sideways movement (the trend or consolidation). If the new low or high is not made, then the sideways trend line will be difficult to fit to the prices, even though the prices may be moving sideways. An upward price movement and new high are shown by the yellow arrow in the example chart.

• Introduction
• Wait for a High or Low Reversal
• Wait for a New Low or High
• Wait for a Second High or Low Reversal
• Draw the Trend Line
• Trading the Sideways Trend Line