In a world where traders chase complex indicators and signals, trendline trading keeps things clean. It's simple. It’s visual. And when done right, it’s extremely effective.

If you’ve ever looked at a chart and thought, “I swear price respects this line,” you’re already on the right track.

Let’s break down everything you need to know about trendlines: what they are, how they work, and how to use them to build a consistent trading strategy.

What Is a Trendline in Trading?

A trendline is a straight line that connects at least two price points on a chart and extends into the future to act as a dynamic level of support or resistance.

In an uptrend, you draw a trendline along the higher lows. In a downtrend, you draw it across the lower highs.

It’s a visual guide to market direction. It shows you the path price is respecting. And most importantly, it helps you anticipate where future price action might stall, bounce, or break.

How Profitable Is Trendline Trading?

Trendline trading isn’t magic. It won’t guarantee wins. But when applied with discipline and context, it can be very profitable.

Here’s why:

• It helps you trade with the trend, not against it.
• It offers clear entry and exit points.
• It gives you high R:R setups when combined with structure and confluence.

What really determines profitability is how well you backtest the setup and execute it with consistency.

Key Insight: Trendlines are frameworks, not exact price predictors. The more you test and refine them in tools like FX Replay, the more dialed-in your edge becomes.

What Are the 3 Touches on a Trendline?

This is where it gets tactical.

The "3 touches rule" is a popular concept in price action trading. It’s used to validate a trendline’s strength:

1. Touch 1: The initial swing high or low.
2. Touch 2: A pullback or correction that establishes the trend.
3. Touch 3: The confirmation touch that solidifies the trendline.

After 3 touches, the market has proven it respects the line. That third touch is often the entry point.

Anything before that? Just a theory.

That third touch, especially when combined with price action (like a rejection candle or engulfing pattern), becomes a high-probability trade.

When Should You Use a Trendline?

Use trendlines when:

• The market is clearly trending.
• You want to visually confirm market direction.
• You need a structure-based entry.
• You’re building a price action strategy without relying on indicators.

Avoid trendlines when:

• The market is choppy or consolidating.
• You’re forcing the line to fit your bias.
• You haven’t confirmed the 3 touches yet.

Pro tip: Trendlines work best in confluence with other tools. Combine them with zones, supply/demand levels, or Fibonacci retracements.

How Do You Use a Trendline Strategy?

Let’s build a simple, actionable trendline strategy you can test today.

Step 1: Identify the Trend

Are we trending up or down? Higher highs and higher lows = uptrend. Lower highs and lower lows = downtrend.

Step 2: Draw the Trendline

Connect the first two swing points (highs in a downtrend, lows in an uptrend).

Extend it to the right. You’re waiting for the third touch.

Step 3: Wait for the 3rd Touch + Rejection

You’re not trading yet. You’re stalking the third touch.

Once price taps the line and gives a clear rejection (wick, doji, bearish engulfing), that’s your signal.

Step 4: Entry, Stop, and Target

• Entry: On confirmation candle close.
• Stop: Just beyond the trendline (above for shorts, below for longs).
• Target: Use structure or 2R minimum.

Step 5: Log and Backtest

Use FX Replay to backtest this setup across different pairs, sessions, and market conditions.

Track:

• Win rate
• Average R:R
• Number of trades per week

The goal isn’t to trade more. It’s to find your A+ setup and repeat it with precision.

Watch FX Replay Break Down Tori Trades Trendline Strategy

Want a visual breakdown of this strategy?

FX Replay's Replay Pro studied Tori Trades strategy to show exactly how she uses trendlines in her price action setups.

Watch the full tutorial here: Tori Trades Trendline Strategy on FX Replay

You’ll see:

• How to draw trendlines with precision
• What confirms a valid 3rd touch
• How to use FX Replay to practice and refine trendline trading

Don’t just watch it—practice it.

Final Thoughts: Trendlines Are Tools, Not Crutches

The biggest mistake traders make with trendlines? Forcing them.

You can draw a line anywhere to fit a bias. But when you use trendlines with structure, confluence, and discipline—they become powerful tools.

Want to fast-track your learning?

Start running this strategy inside FX Replay. Journal every setup. Refine what works. Drop what doesn’t.

Because consistent traders don’t guess. They test.

Recap

• Trendlines = Visual guides that show market direction and structure.
• 3 touches confirm a valid trendline. The 3rd is usually your best trade.
• Combine trendlines with price action and confluence for better results.
• Backtest everything. Use tools like FX Replay to turn theory into confidence.

Next Step: Fire up FX Replay. Start with 50 backtests of the trendline strategy. Track your results. Let the data tell you what works.