Trendline Reject Trade Setup

The Logic

The Trendline Reject trade setup takes advantage of a BROKEN trendline in the opposite direction. For example, a trendline that originally acted as support can become a key RESISTANCE when the reject setup occurs.

Confused? Don't worry, the examples below will help you understand that it's actually a very simple setup that relies only on trendlines.

Chart Setup

The Trendline Reject setup relies ONLY on price action and trendlines. You don't need any indicators at all on the chart. 

The Trading System

The Trendline Reject setup can present either a BUY setup or a SELL setup. The buy setup is a mirror image of the sell setup, and both will be easy to spot with a bit of practice.

Buy Setup

STEP 1
Price Breaks above a RESISTANCE Trend Line
A trendline above the price will always serve as a resistance area on a chart. The first step of the Trendline Reject BUY setup, though, is when price breaks above this resistance trendline.

STEP 2
Price TESTS the Trendline
The same trendline from step 1 now acts as a SUPPORT area since price broke above it. The next time price tests the trendline, the BUY setup has formed!

Sell Setup

STEP 1
Price Breaks below a SUPPORT Trend Line
A trendline BELOW the price will always serve as a support area on a chart. The first step of the Trendline REJECT setup, though, is when price breaks below this support trendline.

STEP 2
Price TESTS the Trendline
The same trendline from step 1 now acts as a RESISTANCE area since price broke below it. The next time price tests the trendline, the SELL setup has formed!

Trendline Reject Setup Video

Example Charts

Trendline Reject BUY Setup

Trendline Reject SELL Setup