Trendline support and resistance: break and follow

After breaking the trendline

We enter in the direction of the breakout with the trendline follow

This is also valid with horizontal support/resistance

Regarding actual market movements

We use horizontal support/resistance and angle support/resistance (trendlines) as appropriate

Support/Resistance market → Breakout and breakdown is the basic strategy

Even if late, it can still fit the trend

From the idea that it’s okay to be late when considering higher timeframes

Why is horizontal support/resistance → breakout prone to failure?

Why is angle-based support/resistance → breakout more likely to succeed?

Simply, it is affected by the number of traders’ positions

In the case of horizontal support/resistance, if it breaks, placing a stop loss is easy, isn’t it?

Also, every trader can readily speculate that a trend might emerge

Therefore, due to traders’ expectations, breakouts tend to fail

It’s not so much that it fails

It’s that there are not enough positions to form a Breakout → Trend market

However, with angle-based support/resistance, it’s harder to take a stop loss

Also, since this is a retracement within a period where a trend had already appeared

Many traders still expect the trend to continue

Because a breakout creates the potential for trend formation and there are enough positions

As a result, breakout → trend formation occurs

Furthermore, for trend markets → breakout → flag to re-trend

This was caused by a large number of positions at the stage where traders “hurriedly reversed”

In other words, if you understand the factors that cause a support/resistance market → breakout → trend formation

It becomes easy to assume a market where this reason is satisfied, and the entry timing will align well

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