I wrote a post a while ago, but nobody commented, so here I'll post it again:
Quoting mbqb11
{quote} One of the worst mistakes I see new traders make using TLs, is drawing them all over their charts and just trying to buy sell whenever one breaks. That can lead to one big headache! Best Mike
And here's my post.
My thinking on the trend lines goes like this (and bear with me, I am being theoretical, but trying to make a valid point ). Every and any trend line will eventually be broken, since we are moving forward in time it is inevitable that the brake will occur at some point. This is due to trend line nature, they cross a path of charts, as charts are always 'travelling' in the same direction - from left to right. My point being and I refer to Mike's quote here is, that we should not trade breakouts of trend lines blindly. So if we are only waiting for a brake of a trend line to happen and just shoot the trade without considering the whole story, we may find ourselves in trouble.
On the contrary, not every support and resistance level will be broken, so that's why I see more significance when a brake of S/R occurs. Trend lines don't form boxes, but S/R levels do. And it is the boxes that we need to recognize and take into account how price behaves around those as Mike explains in the video he shared a few posts back.
Would you agree?