Trendline Broke?...what determines if the trendline broke?...say for daytrading the ES (emini SP)...does one close (aobve or below) of a 5 minute or 10 minute period equal the trendline 'breaking'...how many periods must the high or low close over/below the trendline to be considered 'broke'...I hear the terminiology 'trendline break' all the time but...what makes it 'broke'?..how many periods closing under or over that trendline?..thanks in advance...
what people normally refers to a trend line break is when you draw a trendline linking several high or lows in price, or on your favorite oscillator, and you then have a bar that will close Above or below it, thus ''trend line break'' If the wick of a candle manages to get above/below your trendline, but the candle fails to close above/below it, its commonly referred to as a ''spit'' and the TL is still valid. so a close above the TL would be your answer
thanks...so one simple close above the TL means a reversal...hmmm...there must be other confirmations...correct?
wait, breaking a trend line does automatically leads to a reversal at all. oscillators like stochastic or RSI or CCI or macd are often used to assist in picking up reversal points, volume spikes are also checked, spikes in the $tick, etc. TLB alone wont cut it for example, put up a rsi(14) and watch it when it gets close to extreme values. or put up a dinapoli stochastic and watch for the green line crossing the red line. at the same time, look for a spike at +/- 1000 on the $tick on a minute chart. there are thousands of indicators like these you can combine to assist picking up tops and bottoms. if you use TLB alone for entries you might be severely disappointed TLB they can also be used for exits.