A trendline is a line drawn on a chart to highlight an underlying pattern of individual values. It can take on various forms, such as straight or curved, depending on the shape of the data. Trendlines are commonly used in statistical techniques to understand and forecast data, such as regression analysis. They are easily recognizable lines that traders draw on charts to connect a series of prices together or show the best fit of some data. Trendlines can be used to give a clearer picture of the trend, indicate the direction and speed of price, and describe patterns during periods of price contraction. They are also known as lines of best fit or regression lines, and they graphically illustrate trends in data series and are commonly used when charting predictions. Trendlines can be linear, logarithmic, polynomial, or power trendlines, depending on the nature of the data being analyzed.
In summary, a trendline shows the underlying pattern of individual values in a chart, helping to visualize the direction, speed, and patterns of the data, and can be used to forecast future trends.
