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A line through two points is a ... line. The third hit and bounce is the confirmation that it's not just a line but a support or resistance. The fourth one breaks it 90% of the time. I see so many bloggers passing a line through 2 points calling it a support and when the third hit goes through it they call it a break out. Not in my book.
That 4th hit rule is valid for supports though Thomas. It may keep hitting resistances several times and not break it up. I don't consider the 4th hit as critical on the resistances.
Hi Bouraq, what is the significance of a 4th hit on the channel line? many thanks...
ReplyDeleteA line through two points is a ... line. The third hit and bounce is the confirmation that it's not just a line but a support or resistance. The fourth one breaks it 90% of the time. I see so many bloggers passing a line through 2 points calling it a support and when the third hit goes through it they call it a break out. Not in my book.
ReplyDeleteHi Bouraq, how do you count the number of hits for SP500 middle blue line? Is the 2085 resistance considered the 3rd hit?
ReplyDeleteThat 4th hit rule is valid for supports though Thomas. It may keep hitting resistances several times and not break it up. I don't consider the 4th hit as critical on the resistances.
ReplyDelete