Quote from Anekdoten:
1) Say a DB fails if I see a lower low and a lower high forming after the failure I usually jump short on the next pop failure. On friday afternoon the market took down support and broke the double bottom that formed at the lod, this was against the trend so the buy point was after taking the middle swing high and not underneath support. As far as riding the failure a lower low and lower high aka swing low below that double b was never actually formed, because it was all a fake. Then the market returned and took the middle swing high exploding to the upside for a very nice target.
Conventionally people go long when resistance is broken and go short when support is broken. The question is what exactly does "broken" mean, well when support actually becomes resistance and when resistance becomes support. In other words a swing confirming the action after the s or the r were taken. Why is all this confirmation necessary ? Because it increases accuracy decreases fakes and allows you to trade with confidence.
2) I look for many things but the key is waiting for some evidence in those bars and/or the tape.
3) For me to call a reversal assuming the previous trend was long I need to see a double top followed by a ll and a lh or 2 lls and 2 lhs.
Major trendline failures are extra confirmation. Make sure you look at the big picture to understand how important or unimportant those areas really are.
The more important the more it will be fought by the defending side.
Anek
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