| Trend Lines are the most powerful technical | | | | bigger and faster candles, it may be a sign of a |
| analysis tools. They have existed in the markets | | | | future breakout. |
| for centuries and have proven themselves as a | | | | Breakout Sign #2: Rising Volume |
| reliable trading tool. In this article you will learn how | | | | A rising volume can be a strong sign of a |
| to predict a breakout of a trend line, in order to | | | | breakout - rising volume indicates that the forces |
| enter faster and earlier. | | | | of the market are gaining strength and that the |
| Despite being a reliable and consistent technical | | | | momentum is getting stronger. Volume preceeds |
| tool, trading trend lines is not so easy. A trader | | | | price in its trends, therefore a rising volume can |
| needs to identify the trend lines properly and to | | | | predict a rise in price - that will lead to the |
| decide on a trading strategy. The most popular | | | | breakout of the trend line. A combination of a |
| trading strategies are the bounce, and the | | | | rising volume with rising momentum is a strong |
| breakout. While the bounce is a contrarian | | | | sign of a breakout and in such market |
| strategy, the breakout is a simpler one - that | | | | environment it is recommended not to trade |
| signals a trading signal when a trend line is broken | | | | counter-trendline (bounce). |
| - and a trade is entered in the direction of the | | | | Breakout Sign #3: Lower Highs or Higher Lows |
| breakout. Still, entering a trade at the breakout | | | | This is the last and final predicting sign of a trend |
| itself can be risky as price can retrace back. | | | | line breakout. If the trend line is ascending, lower |
| Trader that trades breakout needs a early alert | | | | highs indicate that sellers are gaining strength and |
| of a breakout - and signals for the upcoming | | | | pushing prices lower - to a breakout downwards. |
| breakout will be now explained. | | | | The same is true with descending trend lines and |
| Breakout Sign #1: Strong Momentum | | | | higher lows. This is a very powerful sign that is |
| The first sign of a breakout is strong momentum. | | | | also useful for support and resistance levels. |
| When price is advancing towards the trend line in | | | | |