Does anyone here heavily rely on trend-line breaks on the 10m/5m charts for shorter term setups? If so what do you look for and any tips on drawing precise ones. Thanks!
I seriously hope not, because it’s speculative.
trading as a whole is speculative
For some extreme scalping (more as a time killer not a high profit strategy) I use M5 levels to see them break and retest. Markets got much tighter than years ago. 5-10 years ago even M15 charts were barely reliable, today the frequency of transactions is much higher and lower timeframes become more and more reliable (still far from H1-W1).
Example of perfectly fine break and retest on M5 AUDNZD this night:
But I would use only for trading off higher timeframe levels - setting levels on H1-D1 and looking for entry on M15-M5 once the retest is happening OR just for few pips scalping. You will see, that spread gets crazy wide on M5 chart and it will be relatively huge to your SL and TP. For scalping setup like this I would take around 10 pips stop loss and try to get out after 1-3 pips in profit (with setting BE as soon as possible)
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Broken trendline on it’s own, I don’t think you can consider a solid signal even in small time frames.
You will see many broken trendlines that turn into fakes
You better have some confluence.
For example, I like a broken downtrend line, if it’s near a support level, and I have enough space until my target resistance level for a good Risk reward.
Also I like the breaking candle to close above the broken trendline, coz sometimes it turns into a bearish pinbar after the break.
It’s also good to see a retest of the broken zone to be respected.
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