Chart & Trading Fundamentals
Chart Patterns & Indicators
Step 1 of 5 · Trend lines and breakouts0 pts
A pattern is not a prediction. It describes how supply and demand have behaved, plus what would have to happen for that description to stop being true — and the second half is the useful half.
A connects higher lows in an uptrend. It summarises one thing: buyers are consistently stepping in earlier than they did last time.
Drawing rules that keep you honest
Two points define a line; a third touch is what makes it worth taking seriously. Connect the extremes of the wicks and be consistent about it.
If you redraw the line every time price violates it, you have stopped analysing and started rationalising. A close below the line does not mean price will fall — only that the sequence of higher lows has ended.
A is price closing decisively beyond a level that previously contained it. The orders defending that level have been used up.
Use closing prices, not intraday pokes, and look for expansion — a break with no increase in participation frequently reverses.
False breakouts
A "fakeout" is when price breaks the level, traps everyone who chased it, and snaps straight back. It is common enough that confirmation matters more than speed.
This is the main practical argument for waiting for a close beyond the level rather than reacting to the first tick through it.
Quick check
Answer to see the explanation — a wrong answer never blocks you.