“1.Uptrend (higher lows)
2.Downtrend (lower highs)
Why is it so to draw an uptrend on higher lows and not on higher highs?
Can the same thing also be said about a downtrend. Can a downtrend be drawn on lower lows instead on lower highs?”
You can draw an uptrend using higher lows and a downtrend using lower highs as long as rules 1 and 2 are there, otherwise it would be considered a chart pattern, not a trend. Or As Tommor mentioned, a channel up or down.
For example, if you had higher lows but you also had lower highs, that would be a symmetrical triangle, or a pennant. If you had lower highs but you had price bouncing back up off the same price (support) over a period of time you would have an ascending triangle as opposed to a downtrend.
Here’s an example of a long term channel down that has turned into an ascending triangle:
Here’s a Pattern chart that helped me when I started. This might help if your strategy uses chart patterns: