Trendline Broken Setup
In this trading setup, we look for trendline breaks. When a trendline breaks, it usually means the trend is changing, unless of course it’s a false break-out. This is where volume spread analysis comes into play: if there is recent demand (on a downtrend), most likely the smart money are taking positions to prepare for an uptrend, and so the break of the down trendline is much probably a true trend change.
1. Strong background
2. Major Demand/Demand signals before the trendline break OR wide range red (high volume) bars with the close near its highs, also before the trendline break
3. The breakout bar should have volume above average
4. Enter right in the breakout bar, or in a dip near the breakout price
The setup is equally valid for short trades.
Stop-loss: Set the stop-loss at the red dot.
Take-profit: Set the take-profit at the green dot.
Move stop-loss: When price reaches the blue dot (the indicator will automatically alert you), the stop-loss should be moved to break-even to protect profits