Kardec Trader explains why traders misunderstand trendlines. Most assume trends have parallel upper and lower boundaries, but the real signal is higher highs and higher lows. Choppy price action and lower highs tell you when a trend is breaking.
Many people assume that the trend is some kind of two parallel lines and the price bouncing from the upper and lower boundaries. That's totally untrue. In my opinion, it's better to use the terms like lows and highs because price might be having just some different lows and highs, but you can always identify when the price is pivoting. These are the highs, these are the lows. When I identify the trend, I just look at the highs and the lows because the most of the time the chart is trending, but sometimes there might be the moment where the trend is inconsistent and it's choppy. You see the lows are getting higher, the highs are getting higher, but here you have some indistinct knowledge about whether it's going going down, creating the lower high, or maybe it is looking for the continuation for even higher high.
