Two-point trendline construction from rise over run

What the construction defines

A trendline is constructed as a straight line whose slope is rise divided by run. Rise is the price difference between the two selected extremes that define the line. Run is the count of equally spaced time bars between those two extremes, and it is the equal time spacing between observations on the horizontal axis. Slope is the signed one-bar change in the line, equal to rise divided by run.

How the two extremes set rise and run

The two reference extremes are chosen after the price series is plotted so the relevant highs or lows can be estimated. The extreme value is then taken from each chosen range.

For a descending trendline, rise is the difference between two selected peak prices. That line is built from two peaks so the one-bar increment is negative. For an ascending trendline, rise is the difference between two selected trough prices. That line is built from two troughs so the one-bar increment is positive.

Run equals the difference between the row or bar indices of those two extreme values. The one-bar slope equals the first extreme minus the second extreme, divided by the first index minus the second index.

How the series is seeded and stepped

The constructed series is seeded at the first touch bar with that extreme price. That observation is the seed bar, where the series is set equal to the first chosen extreme and from which earlier and later values are stepped. Earlier bars subtract the fixed one-bar slope and later bars add it.

How the line is plotted and broken

Plotting the constructed series alongside closing prices produces the visible trendline. Extending the same recurrence past the last observed bar produces exact future trendline levels that can be compared with later prices to identify a break. A trendline break is a later price that crosses the value obtained by extending the same slope beyond the last observed bar.