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How to use trendline to identify price action structure/pattern

Hi everyone:

Many have asked me about how to properly use trendlines to identify price action structures and patterns. So in today’s educational video, I will go over this topic in more detail.

First, I use the trendline as a “frame” to identify structures and patterns, and NOT use it as a Support/Resistance.
What I do is to put in the trendline for the highs and lows of the price action that can help me to pinpoint what the price is doing, what kind of a correctional structure that it is currently in.
Typically after an impulse phase of the market, then we start to identify a structure/pattern by connecting the swing highs and lows.

Second, as I always point out in my videos/streams, a structure/pattern needs at least 2 swing highs and lows to classify as a structure.
Certainly more swing highs and lows are good, but it's not necessary. Often I get asked about the “third touch” or more. To me it's not necessary, but if price does form the third touch, I would proceed the same as the price has a second touch.

Third, we are identifying the price action correctional structure, and sometimes the market is not perfect, it will not give you a textbook looking bullish flag as an example.
Hence the backtesting and chartwork from each trader is important to get your mind familiarized with the market and its “imperfect” development of the price action.

After identifying the impulse phase, then look to see what the market is doing. Is it falling into a consolidation ?
Not much movement except sideway price action, or ascending/descending like consolidation will give you a clue on whether the price is correcting to continue, or correcting to reverse.
Take a look at the educational videos I have made in the past regarding the type of correctional structures we typically see in the market. All the videos are down below.

Continue to backtest and do chart work to get familiar with drawing in the structures/patterns. The more you do these, the better and easier it is for you to identify them in your trading journey.
Remember, the market is not perfect, so not all the structures/patterns will be “Textbook” like on the real, live market. Learn to deal with the “imperfect” market, so you can better utilize price action analysis to your advantage.

Any questions, comments or feedback welcome to let me know :)

Thank you

Below are all my price action structures/patterns videos on different type of corrections.

Continuation and Reversal Correction