Validation the trendline breakout – the first TD breakout qualifier

Once a TD-line has been broken a trader needs to define if the price breakout is true. Thomas Demark singled out three TD Breakout Qualifiers. In this article the fist one will be described.

The first Breakout Qualifier:

For a downside breakout, the price bar prior to the downside breakout must be an up close (Figure 1). For an upside breakout, the price bar prior to an upside breakout must be a down close.