This is the trading playbook where the charts do the talking and every session makes you a better trader. Hello everyone and welcome to the trading playbook. My name is Len Ho here with verified investing your host and thank you guys so much for joining me for my second Saturday episode. I read all the comments. Thank you guys so much for all the kind comments. I really appreciate you guys um liking this content and hopefully it's been helpful for you. Um before you go anywhere, before we head into it, please like this video and consider sharing it um and subscribing to this YouTube channel. It really helps the algorithm know that hey, you want to see more content just like this. With that being said, let's get into the play. Now, for today's episode, we're going to be talking about trend lines. And trend lines are something that are so important. I use every single day while trading. And at first, they might seem like imaginary lines drawn on the chart because they are. However, if you do some research and start drawing trend lines, you find out that wait, these trend lines, right? While the lines are imaginary, they um they mean something else, right? It it indicates a larger trend and what is expected to happen once a trend breaks. Now, the way I like to think about things are like this. Let's say you're with your friends and you're betting on a specific team to win, right? Or let's you're playing rock paper scissors, right? and you're betting that Rock is going to win and Rock keeps winning, keeps winning, keep winning. So, you just ride it out. What happens when Rock loses for the first time? You have some people that will bet Rock again, right? Some people that'll change their rock, but the amount of bets on Rock will go down. Well, what if Rock loses a second time? Then you'll see a a complete deviation, right? the number of people betting rock, you know, will go down significantly from where it was when you were on that streak. In that same way, we try kind of use trend lines to decipher where price is actually heading to. Um, but anyways, let's hop into the charts and I'll show you a couple ways that I use trend lines. Here is reading the tape. So, taking a look here on uh on Tesla immediately when I look for trend lines, what I like to do or take two or three areas of significant pivots, say these this low here, which is basically the lowest point we've got all year, and connecting it through some other price action, right? And what do you get? A nice trend line, right? a trend line that says, "Hey, what does this mean?" Well, an ups sloping trend line is actually bearish. I'll write this down for you on your screen. Ups sloping sloping bearish down sloping. But this is all you need to know, right? It's basically the reverse ups sloping trend line. This is bearish. Meaning when that trend finally breaks, it favors a fall, right? And you can see that playing out perfectly. At first, price started here, tried to break this level, but got a bounce there, tried to break it again. And the more times that you kind of test this trend line, the more powerful it is, right? Knowing that, hey, this is support, this is support, this is support. And finally, when you get that break, look at this beautiful fall here on Tesla. About a 9% drop there, right? But there are trend lines everywhere, right? Just keep keep remembering this. Ups sloping is bearish, downs sloping is bullish. Well, if we look on the other side, we can say, "Hey, look at this. Tesla also has a trend line like this." And if you're only looking on this one, you can say, "Hey, you hit here, you hit here, and you hit here." So when we finally break up, it's actually looks potentially bullish, right? Potentially looks bullish on this push on this break to the upside out of this down trend line. Right? So, kind of interesting to uh to watch here on Tesla. And we'll keep this in mind, right? And I'm going to copy and paste this onto the next chart we look at just so we have that reminder in the top of your screen. Next one here, Netflix, right? We're going to keep this in mind, this ups sloping bearish, downs sloping bullish. Before I go ahead and tell you if this is bullish or bearish, I want you in the comments or on a piece of paper to write down is this bullish or is this bearish. All right, now that you've had a chance to do that, let me go ahead and draw how show you how I would draw a trend line here. Well, you have this kind of down sloping trend line which is actually bullish. We're going to refer back to that little page there. We can connect the top one to continue draw trend lines, but that doesn't quite work. And I can draw something like this. Say, well, what is uh what does this mean? Right? What does this mean now that it's hitting this? Well, is this bullish or bearish? We know that downs sloping trend lines are bullish, but what if they're hitting it instead of breaking out? Well, another thing you should learn about trend lines is that these trend lines should and doesn't mean it has to should provide support. So, what we're expecting here on Netflix is a push up and maybe a bounce back and have this down sloping trend line continue to be support for Netflix. I continue to be support. Let's move on to the next chart and we're going to take this with us. Going to do a couple more charts here for you. Now, Reddit, tell me, is this bullish or bearish? So, this for me actually is bearish, right? But it's only bearish if you break this ups sloping trend line, right? Only if you break this nice ups sloping trend line, right? Should that break, you're favoring a move lower. But what if you're not testing that that bottom trend line? Then what are you going to do? How can you trade this? Well, one way you can do it is by doing this. We have ups sloping trend line similar here to here on Netflix how you'd be like okay well this down sloping trend line is bullish and should provide support here you can buy here on Reddit on this ups sloping trend line because it's bearish you could actually look to potentially start a short position at this trend line. So that's another way that you can play this trend line. You don't have to wait for a breakdown. You could say, "Hey, it's coming into resistance on this trend line." Right? A couple more charts for you. Let me go ahead and take this with us on Micron. Taking a look at this, right? I'm going to show you another way that that that trend lines are used. If you were to look for levels of resistance on Micron, if I say support, it's easy. We remember from last week's episode, gap fills. Well, there's a gap fill right there. 981. Amazing. But what about resistance? There there are no resistance levels above using just gap fills. Well, while that might be correct, what there are are trend lines. There are trend lines. And if we go ahead and draw this nice ups sloping trend line, which we remember ups sloping is bearish, we see that hey, previous all-time high, previous all-time high, this would be an all-time high. expect resistance somewhere here around this $181 to $1,200 level because it coincides with these previous pivots creating a trend line. All right, before I get on to the next chart, I'm going to give you a little edge that I like to use when taking a look and using trend lines. So, here's the edge of this week. When you're using trend lines, it's important to use significant levels. I'm not just picking arbitrary lines. I love to pick lines or pivot points that mean something. So, this was the previous all-time high. This was also a previous all-time high. If we take a look here on Reddit, this was the high of February. This was the high of April. And this is the highest point that we've got basically this year after February. Right? So levels of significance for the bottom side. You see I picked the the lows, right? This is the uh Iranian war lows, I'll call it. So the lowest point we've got all year and this is the recent low. So you guys see that I'm using significant levels, right? Not just random levels. And finally, let's take a look at a little more of a mixed bag. a little more difficult to draw. Take a look at this and tell me where you see a trend line. It's bullish or bearish. Well, now that you've done that, I'm actually going to draw my trend line like this. And why I'm drawing like this is because yes, it broke back broke under, but what did it do right after? Right, it retraced right back into that trend line. And this is where I'm going to explain how to potentially play this and go over some common mistakes when you're using this playbook. So, when you're playing an a trend line for a trade, there are two schools of not two schools of thoughts, but two different ways you can play it. You can either enter a short there, right? Let's say it breaks down, it closes here. You can enter a short looking for further further downside, right? or right or you can look for a retrace and then re-enter. But a common mistake that people do are say, "Hey, now we're breaking back above it. We're going to go long into this because this trend line should provide support," which it can. But instead of looking for a long off of that level, wait to see what it does. See if it potentially comes back down. Test this trend line again. and instead of going long, look to potentially go short. Now, let's move on to tomorrow's play call. In tomorrow's episode, I'm going to give you three trade setups using these trend lines that you can expect to use this upcoming week. Thank you guys so much for watching this video. My name again is Lon Ho here with Verify Investing. This has been the trading playbook. Please comment, like, and subscribe. Tell me what you want to see next week and I'll see you tomorrow, guys. Have a good one. Take it easy. Bye-bye. >> That's the trading playbook. If today's episode was your film study, the principle, the pattern, the framework, the application is waiting for you on Sunday. Real setups, real levels, ready before Monday opens. Subscribe to Verified Investing on YouTube. Saturday teaches, Sunday prepares, show up ready.