Ask Colin

Do you enter into the market once you see a breakout of the resistance level or a breakout of the trendline? Which one is more accurate?

My primary method is to trade breakouts of resistance levels at the top of broad trading ranges.

I sometimes trade trendline breakouts, but I find them less reliable in my time frame. They seem to work better for short term moves. I am looking for big moves.

An exception will be if I see a stock begin to trend up and the 260-day moving average is also turning up. In this case I buy into the trend using my usual entry signals. The trendline is not part of my decision process and I in fact never draw trendlines on my charts. I do teach them though and sometimes write about them in Shares.


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