These simple rules, if followed, can assist in identifying HIGH PROBABILITY TRADES!
1⃣ Trendlines are zones, not straight lines!
- Because of price volatility, prices frequently spike on both sides.
- To get the best fit trendline, consider trendlines as zones from multiple swing highs (including wicks).
- With zones, your chances of winning increase.
2⃣ Trendlines with more touchpoints
- Any trendline with 3 or more touchpoints is a very significant one
- The price points around significant trendlines are important & should be watched
Observe the commentary on the chart below
3⃣Trendlines on higher Time Frame are more significant
- A trendline on the 15 min chart will be easily broken than a trendline on the daily
- A shorter time trendline break might just mean a consolidation phase before the price moves up again
Due credits to @dmdsplyinvestor
4⃣ The steeper the trendline the more likely it will break
- The less steep the trendline angle, the more significant it is & more likely to be respected.
- Any trendline with an angle greater than 30° is steep & likely to be broken before the previous trend continues.
5⃣ Trendline Adjustments are important
- The 1st trendline should be drawn connecting the swing lows
- Once the 1st trendline breaks, wait for new high & connect the recent swing lows
- Repeat this - Remember Rule 4
Remember, all the 5 rules apply for down trendlines as well!
Learnt something new?
1⃣ Trendlines are zones, not straight lines!
- Because of price volatility, prices frequently spike on both sides.
- To get the best fit trendline, consider trendlines as zones from multiple swing highs (including wicks).
- With zones, your chances of winning increase.
2⃣ Trendlines with more touchpoints
- Any trendline with 3 or more touchpoints is a very significant one
- The price points around significant trendlines are important & should be watched
Observe the commentary on the chart below
3⃣Trendlines on higher Time Frame are more significant
- A trendline on the 15 min chart will be easily broken than a trendline on the daily
- A shorter time trendline break might just mean a consolidation phase before the price moves up again
Due credits to @dmdsplyinvestor
4⃣ The steeper the trendline the more likely it will break
- The less steep the trendline angle, the more significant it is & more likely to be respected.
- Any trendline with an angle greater than 30° is steep & likely to be broken before the previous trend continues.
5⃣ Trendline Adjustments are important
- The 1st trendline should be drawn connecting the swing lows
- Once the 1st trendline breaks, wait for new high & connect the recent swing lows
- Repeat this - Remember Rule 4
Remember, all the 5 rules apply for down trendlines as well!
Learnt something new?
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⭐ ALGO Trading