April 05, 2011 at 2:00 pm | | Comments 2

Trend Line Entries: Tilted or Flat?

I take a lot of trend line trades, as they give me a clear indication that price is either clearing an important level, or that it’s making a meaningful turn.

Recently I was asked why some of those trend lines are flat (lateral), and others are tilted. Additionally, I was asked how I determine my entries on each. Here’s what I said:

Whenever a trend line is slanted, I go with a break of the trend line itself. In the case of a bullish trend line break (a move above a descending trend line), I’ll place a buy stop just above the line itself, perhaps only a couple of pennies above it. These tilted trend lines are themselves the resistance for a stock, so once they’re broken, the stock tends to be free to move higher.


Whenever there’s a flat trend line of support or resistance, it’s evident that price is bumping up against a key zone which remains constant.  Sometimes this is at a round number, like $100, but it doesn’t have to be.  The way I trade these flat trend lines is to set a buy stop 10-15 cents past the resistance zone, as that will help to confirm I’m entering upon a true breakout that’s taking place rather than a brief penetration of only 1-5 cents which could prove to be a head fake.


When you’re drawing your trend lines, consider the overall situation.  Is price struggling to clear a constant level?  Use a flat trend line if so.  If price is simply seeing a counter-trend pullback, then the pace of the pullback is better seen with a tilted trend line .

Trade Like a Bandit!

Jeff White
Producer of The Bandit Broadcast

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  1. Jeff,

    I like this and I also look back in history to see how far a stock moves through moving averages or previous trend lines. Sometimes a stock has a tendency to always go .10 before reversing on a failure, sometimes the hammers reach is .30. I set my buy and sell stops outside of the typical move of each individual stock.

    Happy Trading

  2. Hey Brian, thanks for sharing what works for you! Good plan on setting your stops outside the typical move. Amazing how often a stock repeats previous behavior, especially if it’s somewhat recent.

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