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Trendline Breakoutthe level you drew yourself

Evidence: WeakBeginnerBreakout · Price action

A descending trendline connects successive lower highs. When price closes above it, the sequence that defined the move has ended.

This is the least objective level in the library and the page says so. Two traders given the same chart will draw two different lines — through wicks or through closes, from this high or that one — and get two different trades. The rules below exist to remove as much of that as possible, not because removing it makes the strategy good.

The evidence here is for what happens when resting orders trigger, not for this way of drawing the level. The level is a choice; the cascade behind it is the mechanism.

Category
Breakout · Price action
Timeframe
H1 primary · H4 to find the line
Suitable pairs
EURUSD · GBPUSD · XAUUSD · US30
Session
London and New York
Indicators / tools
Swing highs by a fixed fractal definition · ATR(14). Nothing else.

Valid setup

BO-08 · TRENDLINE BREAKOUT — VALID SETUP GBPUSD · H1 · three touches on the line, then a close above it by more than 0.2 × ATR LONG 1.26773 1.26889 1.27005 1.27121 1.27237 1.27353 1.27469 to the last major high 1R three touches, bodies not wicks TARGET = the last swing high before the downtrend ENTRY = next open after the break STOP = below the last swing low, not below the line 1 2 3 4 1.27140 1.27020 1.26840 ① A second touch — still only a line through two points ② The third touch makes it a level ③ Definition fixed in advance: bodies, three-bar fractal ④ Close above the line by more than 0.2 × ATR ⑤ Enter at the next open ⑥ Stop under the swing low — the line keeps moving

Exact rules

Entry

  • Fix the definition before you draw anything: connect swing highs identified by a three-bar fractal, using the candle bodies' highs, not the wicks. Write it down and never vary it inside a test.
  • The line needs at least three touches. Two points make a line through any two points — three make a level.
  • Trigger: a candle closes above the line by more than 0.2 × ATR(14). A close a pip above it is not a break.
  • Enter at the next bar's open.
  • The line expires after twenty bars without a touch. An old trendline is a line, not a level.

Stop loss

  • Below the last swing low before the break, plus 0.3 × ATR(14).
  • Not below the line. The line moves every bar, and a stop that moves with it is not a stop.
  • Risk 0.5%.

Take profit / exit

  • The last major swing high before the downtrend started.
  • Minimum 1:2 against the honest invalidation, measured before entry.
  • A retest variant — wait for price to come back to the broken line and hold — is worth testing separately and usually has a tighter stop.

Build Trendline Breakout

Reading this page is free and always will be. Taking it is what costs — the complete MQL5 for the rules above, yours to keep, permanently. Five of them cost $10 and they never expire.

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Trading carries risk and most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade. The chart is an illustration of the rules on constructed candles — it is not a record of a trade and not a backtest.