Point Break Charting
Point Break Charts are often found under different names, Three Line Break, Three Point Break so on. The way they work is by basically measuring the strength of a rally or sell off compared to previous bars. Here are some things to remember when reviewing data from a Point Break chart.
If the price makes a new high compared to the high of the previous bar, then a new bar (green in this case) is constructed. If the price makes a new low compared to the low of the previous bar then a new bar is made (white in this case).
The caveat of Three Line Break charts is when three consecutive colors are made. If the chart builds three green bars, then the price must reverse below the low extreme of the series before a white bar is constructed. The same is true for the downside. If the chart builds three white bars, then the price must be able to surpass the high extreme of the series before a new green bar is built.
The (3) in Three Line Break refers to the reversal amount that a series must complete to be considered a true reversal.
Point Break Charts are often found under different names, Three Line Break, Three Point Break so on. The way they work is by basically measuring the strength of a rally or sell off compared to previous bars. Here are some things to remember when reviewing data from a Point Break chart.
If the price makes a new high compared to the high of the previous bar, then a new bar (green in this case) is constructed. If the price makes a new low compared to the low of the previous bar then a new bar is made (white in this case).
The caveat of Three Line Break charts is when three consecutive colors are made. If the chart builds three green bars, then the price must reverse below the low extreme of the series before a white bar is constructed. The same is true for the downside. If the chart builds three white bars, then the price must be able to surpass the high extreme of the series before a new green bar is built.
The (3) in Three Line Break refers to the reversal amount that a series must complete to be considered a true reversal.