What price action to consider in a Trendline Break using multiple TF analysis?

[themickey002]

You can consider a break of a long term trendline as valid only if the price visits that level again and close below it. Additional confirmation can be gained on shorter-term TF if the price works its way down to the trendline again and closes below it at any subsequent time.

 

[SunTrader]

Only if you want to miss a lot of breakouts/breakdowns.

 

[easymon1]

what else could we consider in terms of technical/price action trading upon trendline break?

https://www.elitetrader.com/et/thre...t-right-here-baby.343012/page-14#post-5490296

 

[volpri]

If I'm intra day trading ES micro e-mini futures using only price action on the 5 min to 15 min time frames, I like to use multi-time frame analysis, especially the higher Daily TF and see how its behaving. Assuming we are in an UPTREND on the Daily and then there is a Trend Line break on the Daily, what do fellow traders look for in order to believe that this downtrend may continue?

So far I consider the size of the bear bar that broke the trendline? Also was there another strong follow thru bear bar after the breakout the next day and so on. But my question is how many follow thru bear bars should we consider (on the daily charts trend line break) before entry? I'm assuming we can't wait for too much follow thru, otherwise it could be a late entry and we potentially miss out on a trade opportunity?

Taking into account false breakouts, follow thru bars and their size, lower TF confirmation of similar trend to higher TF, support/resistance levels, round #'s, magnets, what else could we consider in terms of technical/price action trading upon trendline break?

Any insight on this?

Thx

I have already mentioned some things you can look at however, if you have a mind to look into tape reading then the trend line break is a reaction (pb) so in tape reading you are going to watch the volume on that reaction. Generally:

1) Decreasing volume on reactions (pd’s) favor a resumption of the previous trend (i.e. resumption of the previous bull trend)

2) Decreasing volume on rallies (pb) favor resumption of the decline (i.e. resumption of the previous bear trend)

What you want to watch for is “dullness” on reactions in bull trends and “dullness” on rallies in bear trends.

1b) Said another way. When the volume increases on the advancement of the bull trend but decreases (light volume) on the PB’s then odds favor a resumption of the bull trend.

2b) Said another way. When volume increases on the advancement of the bear trend but is light on the pauses or PB’s then this sort of action favors a resumption of the bear trend.

On charts tape reading is an interpretation of volume correlated with price movement as seen graphically on a chart. This type of tape reading IS NOT time and sales. The action of the volume renders hints about supply/demand. Price simply shows the monetary “value” of the volume. Volume shows the amount of dollars in play at price levels.

If you don’t mind holding through drawdowns this type of tape reading can render nice profits. However, if a wrong interpretation is made it can result in devastating losses.

I am a scalper of 1 to 8 points over and over in ES, MES, so I rarely look at volume. It just adds another consideration to making decisions that I find not necessary to scalping 1 to 8 points.

The old timers used to say:

“In a bull trend never sell a dull market”

The same applies in a bear trend.