> All channels do break, but we can never know in which direction they will break.

I agree.

Thanks for clarifying, I think thats helpful for your readers and your responses are appreciated.

NTH

I was referring to trendline channels in general, and I changed the wording to make it clear that I wasn’t talking specifically about this trendline in that statement (it wasn’t clear before, admittedly).

All channels do break, but we can never know in which direction they will break. We can only know that the market cannot channel forever, due to the price alternation principle. In other words, one of those two trendlines will fail, and price will often eject out of the channel. That’s not to say that it won’t return back, but generally a true break leads to continuation of the move.

I’ll try to cite sources or past testing results when possible, and I agree that I need to document more statements more fully.

I’m always trying to improve and am thankful for feedback!

> This is a textbook example of a consolidation channel
> Eventually, the line will break, but until then, odds favor trading with the trendline

But is that true? ie: will the market break in the direction of the channel trendline on a regular basis? Have you backtested that or have a good reference for that from elsewhere?

There was a similar channel on 4th Mar on DJIA but it broke to the upside, very agressively. Just an example.

You may be right, but I think each time you make a claim that ‘odds favour xyz’, I think it needs to be backed up in some way. Maybe I missed that somewhere on a previous blog entry.

As always, good luck with your trades,

NTH.