Next, let's talk about the support and resistance role of trend lines on prices. A trend line is essentially a straight line that allows us to visually see the direction of the trend, correctly reflecting the direction of price movement. It can provide us with the basis and rationale for holding positions continuously, not only indicating the current price direction but also providing a basis for our trading. The characteristic of an uptrend is that the lows are continually rising, while the characteristic of a downtrend is that the highs are continually falling. We can draw an upward trend line or downward trend line based on these characteristics.
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Speaking through the image: In the illustration of an upward trend line, after a phase low point A, the price rises, then retraces after reaching a phase high point B, generating a new low point C. We notice that the new low point C is higher than the previous low point A, which is what we mean by the lows rising.
By drawing a straight line through low points A and C, we obtain the desired upward trend line. After the price rises again, it begins to retrace to point E, which is near this upward trend line. Based on the support role of the upward trend line, we can go long near point E.
If a clear bottom reversal pattern appears near point E, such as a hammer, 'morning star', 'rising sun', etc., the likelihood of an upward movement is relatively high.