The notion «trend line» is often interpreted ambiguously and inconsistently. Unfortunately in most cases the procedure of establishing trend lines is personal, though from the variety of these lines only one of them is true.
Thomas Demark developed a method of choosing two points to draw TD-trend lines impersonally (TD is the abbreviation of the author's name and surname). In consequence of usage of this method the graphical analysis of trend lines looses its subjectivity and turns into a mechanical procedure.
The first thing it is necessary to refuse of is forming trend lines form left to right. The current price movement is much more important than the price dynamic in the past, that’s why trend lines must be drawn from right to left so that the latest market data are in the right part of the chart.
Points used to draw trend lines are called TD-points and lines themselves are called TD-lines.
Supply price pivot point is a bar with the high which is higher than the highs of the bar to the left and right. Downward trend lines are drawn between the highs of such bars.
Demand price pivot point is a bar with the low lower than the lows of the bar to the left and to the right. Upward trend lines are drawn between the lows of such bars.
To draw a trend line it is necessary to find consequently two TD-points and to draw a diagonal line between them.(Figure 1).
