Traders feel that when a market is going to support, that it will break that support. In fact, in an uptrend, this is where strong hands will defend the position, and vice versa in a downtrend. Traders area always thinking breakouts, and that's where your mind can play havoc with you. Funds and specs can make large money in trading breakouts, but this tends to be rare because they tend to get out too early and miss most of the move. If they do catch the move, they always tend to get out too late, when the trend changes. I like to buy in uptrends at support because this is where large interests tend to be as well, and I want to be on the side of trend as often as possible.

Very well said in regards to the thought process when faced with buying a dip on a trend line. I know I speak for myself that I catch myself often not entering the trade "in case it breaks support".

I take it you routinely wait for the creek to be re-tested for support before entering?

Gary,

BAC has been in a range for what seems to be a long time. I've heard that sometimes this type of situation might be a "Bull Trap" where there might be a sudden Bearish move soon. How have you dealt with "Bull Traps" and "Bear Traps"? What's the best way to recognize them?

A trend line is not such a reliable tool with Wyckoff without the use of the reverse trend line. The mirror image of a trend line is a reverse trend line. This shows (reverse trend line) an overbought / oversold condition ONLY, in the channel. It is used as a cautionary line, but does not give a counter-trend signal.

On the volume chart, do you use an SMA or an EMA to evaluate the strength of the volume? If so, what period do you recommend for the indicator?

Wyckoff has specific instructions on how to plot a trendline; so from what I'm reading on your response, the reverse trendline is plotted using the same instructions in reverse? Does that mean from the end of the trend back to the beginning of the trend or does it mean from the beginning of the trend, but on the reverse values (high vs low) of the bars. The reason I ask this is because I seem to remember that Wyckoff said that it is important to plot a trend correctly; so I would think that plotting a reverse trend should also be done properly. Like I said, reverse trends are new to me. I would like to find out more about them.