Validation of the trendline breakout – the third TD breakout qualifier

For an upside breakout, the previous price bar’s close plus the previous bar’s the difference between the bar’s close and the low of the same bar (or the close two bars before the breakout if it is lower) must be lesser than the breakout price (Figure 1).

For an downside breakout the difference between the previous price bar’s close and the difference between the high (or the close two bars before the breakout if it is greater) and the close of the same bar is greater than the breakout price.