Trend is your friend. Dance with your friend. Tune to the trend.
Volume invariably rises at the break out point, which indicates a strong trade.
Study the chart given below.
This is a monthly bar chart. See how the prices have consolidated for nearly eight years before it broke above the rectangle or channel formation. The prices retraced back to test the resistance turned support line. It has stayed there for an year. It then made a explosive movement up to reward the trader ten times on the investment.
Many times the prices reverses and tests the break out point, before continuing in the direction of the breakout. Best entry is made at this point with the stop loss above or below the swing formed at the point of testing.
Longer the time the prices spend time between the trend lines, stronger will be the channel break out results.
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