Step 1: Price breaks cleanly through the trendline. Step 2: Price retraces back to the broken trendline from the outside. Step 3: Former support flips to new resistance (or vice versa). Step 4: Execute entry on verified rejection of the old line.
Many traders treat trendlines as rigid, precise barriers. This can lead to missed entries and false signals. The secret is to view a trendline as a flexible zone of price action. In a volatile market, price can "whip" slightly above or below a line (a deviation or "wick") before respecting its direction. By treating the line as a zone of value, you allow for these normal market fluctuations and avoid being "stopped out" by noise.
Never mix candle wicks and candle bodies when drawing a single trendline. If you start a trendline from a candle wick, every subsequent anchor point must connect to a wick. If you start from a candle body, stick strictly to bodies. Mixing the two creates structural distortion and leads to false breakout signals. 2. The 3-Point Validation Rule
Smart Money Concepts (SMC) often deliberately push price through a visible trendline to trigger stop-losses (liquidity grabbing) before moving in the original direction. Look for a sweep (sharp dip followed by an immediate reversal) rather than a clean breakout. Phase 4: Advanced Techniques (Secrets 16-21)
Why? Markets frequently "kiss" a trendline—touching it or even briefly piercing it by a few ticks—before reversing. If your stop is exactly at the line, you will be stopped out by normal market noise.
A trendline is a map, but you need a key to open the trade. The secret is using price patterns as your trigger to actually enter the trade. For a bounce trade, you wait for price to approach the trendline and then look for a confirming candlestick pattern. A bullish engulfing pattern or a hammer confirms the bounce for a long trade, while a bearish engulfing pattern or a shooting star confirms it for a short trade.
To filter out false breakouts, implement the two-candle close rule. Do not enter a breakout trade when the first candle breaks the trendline. Wait for a second consecutive candle to open and close completely outside the trendline structure. This confirms a true shift in market regime. 14. Measuring Target Projected Distance
Markets trend only about 20% of the time. The remaining 80% is ranging, choppy, or transitional. Even in those trending periods, false breaks and unexpected reversals occur regularly.
When a long-term trendline is broken, retail traders often panic and immediately expect a massive crash or a vertical rally in the opposite direction. In reality, markets usually transition into a sideways trading range first.
Drawing lines across candle closes filters out erratic, short-lived noise to focus purely on agreed-upon value.
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: Focus on significant swing highs and lows. Avoid "forcing" lines by connecting minor price fluctuations or noise.
Price Chart: Low --------> Higher Low (Touches Trendline) RSI Oscillator: High -------> Lower High (Bearish Divergence) 13. The "Two-Candle Close" Confirmation Rule
Trendline Trading Strategy Secrets Revealed 21 Full __link__ <HD 2024>
Step 1: Price breaks cleanly through the trendline. Step 2: Price retraces back to the broken trendline from the outside. Step 3: Former support flips to new resistance (or vice versa). Step 4: Execute entry on verified rejection of the old line.
Many traders treat trendlines as rigid, precise barriers. This can lead to missed entries and false signals. The secret is to view a trendline as a flexible zone of price action. In a volatile market, price can "whip" slightly above or below a line (a deviation or "wick") before respecting its direction. By treating the line as a zone of value, you allow for these normal market fluctuations and avoid being "stopped out" by noise.
Never mix candle wicks and candle bodies when drawing a single trendline. If you start a trendline from a candle wick, every subsequent anchor point must connect to a wick. If you start from a candle body, stick strictly to bodies. Mixing the two creates structural distortion and leads to false breakout signals. 2. The 3-Point Validation Rule
Smart Money Concepts (SMC) often deliberately push price through a visible trendline to trigger stop-losses (liquidity grabbing) before moving in the original direction. Look for a sweep (sharp dip followed by an immediate reversal) rather than a clean breakout. Phase 4: Advanced Techniques (Secrets 16-21) trendline trading strategy secrets revealed 21 full
Why? Markets frequently "kiss" a trendline—touching it or even briefly piercing it by a few ticks—before reversing. If your stop is exactly at the line, you will be stopped out by normal market noise.
A trendline is a map, but you need a key to open the trade. The secret is using price patterns as your trigger to actually enter the trade. For a bounce trade, you wait for price to approach the trendline and then look for a confirming candlestick pattern. A bullish engulfing pattern or a hammer confirms the bounce for a long trade, while a bearish engulfing pattern or a shooting star confirms it for a short trade.
To filter out false breakouts, implement the two-candle close rule. Do not enter a breakout trade when the first candle breaks the trendline. Wait for a second consecutive candle to open and close completely outside the trendline structure. This confirms a true shift in market regime. 14. Measuring Target Projected Distance Step 1: Price breaks cleanly through the trendline
Markets trend only about 20% of the time. The remaining 80% is ranging, choppy, or transitional. Even in those trending periods, false breaks and unexpected reversals occur regularly.
When a long-term trendline is broken, retail traders often panic and immediately expect a massive crash or a vertical rally in the opposite direction. In reality, markets usually transition into a sideways trading range first.
Drawing lines across candle closes filters out erratic, short-lived noise to focus purely on agreed-upon value. Step 4: Execute entry on verified rejection of the old line
This public link is valid for 7 days and shares a thread, including any personal information you added. This link or copies made by others cannot be deleted. If you share with third parties, their policies apply. Can’t copy the link right now. Try again later.
: Focus on significant swing highs and lows. Avoid "forcing" lines by connecting minor price fluctuations or noise.
Price Chart: Low --------> Higher Low (Touches Trendline) RSI Oscillator: High -------> Lower High (Bearish Divergence) 13. The "Two-Candle Close" Confirmation Rule