When there are two or more lows that are constantly rising in the market, connecting the lows forms an upward trend line; when there are two or more highs that are constantly falling in the market, connecting the highs forms a downward trend line.
Although investors have different opinions on trend lines, it is undeniable that trend lines are one of the most effective tools for analyzing trends. Investors should be proficient in drawing trend lines in actual trading so as to quickly identify the current market trend.
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After the market rises to a certain high point, it starts to fall at the first circle on the left side of the stage high point. The second high point in the falling market, at the second circle on the left, cannot "stand" above the previous high point, but "stands" below the previous high point, which means that the high point is constantly being lowered. The continuous lowering of the high point is a typical characteristic of a downward trend. At this time, connecting these two high points forms the downward trend line we want.