The 3-Touch Rule.
Any two points on a chart can be connected by a line. That doesn't make it a trendline. A line only becomes a 'valid' trendline once price touches it for the third time and reacts.
The more times a trendline is touched, the stronger it is perceived to be—but also the more likely it is to eventually break as the trend matures.
Drawing for Clarity, Not Hope.
- Don't force a line: If it doesn't fit naturally, the market isn't respecting that angle.
- Angle matters: Very steep trendlines are unsustainable and likely to break quickly.
- Use the wicks: Capturing the extremes gives you the 'true' boundary of price action.
- Update regularly: As price makes new highs or lows, adjust your lines to reflect the current flow.
Trading the Break and the Retest.
Many traders lose money by 'jumping the gun' on a trendline break. They see price move one pip past the line and buy. Often, this is just a wick taking out liquidity before the trend resumes.
A safer entry is the Break-and-Retest. Wait for a full candle to close outside the line, then wait for price to return and treat the old trendline as new support or resistance. This confirmation is vital for protecting your 3% daily limit.
Confluence: The Secret Sauce.
A trendline on its own is okay. A trendline that intersects with a horizontal support level and a 50-period moving average is a high-probability trade zone. This is called confluence.
In your MixFunded evaluation, focusing on confluence trades ensures that you only risk your capital when the odds are heavily stacked in your favor. With no time limit, you can afford to wait for these 'perfect' intersections.