Channel Surfing

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One other factor that adds to a confirmatioI;fI'1n�ifs an increase in

volume or the number of trades. We are talking about a substantial
increase, not just a minor one. Greed and panic should be motivating
the market during these times, resulting in a flock of traders scampering
to get in or out. If there is no serious increase in the amount of trades,
then the market is not responding positively to the breakout and may fail
to sustain it and is in danger of fai ling.
These confirmation techniques can be used for practically any type of
breakout trade you are considering. There are a number of patterns where
you can readily apply them, such as with triangle and wedge patterns. But
some breakout trades will require a more aggressive approach by entering
at the break. Of course, these trades will also include more risk, but the
pay-off can be more frequent trades and greater rewards. However, it must
be understood that the breakout trades that we are about to discuss are not
of the same caliper as trading range breakouts. There are usually no
multiple hits against support or resistance and you are not likely to see any
substanti.al increase in volume when they break.
Earlier, we discussed an entry based on the break of a secondary channel
called a rebound entry. The signal required a previous break off ofa larger
channel before a set up was in place. In effect, the two channels acted as a
form of confirmation because of a repeated break. Now we are returning
to this same basic concept, but with a twist.

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