Bounce or Break?

For anyone that trades trendlines, how many times have you had a confirmed break of trend only to get stopped out right before the big move?

This has been a challenge for me for a long time.

My strategy works very well, but the market chops, leaving me losing more than I'm making. Even though my prediction's are spot on most of the time.

Take this image for instance, price breaks trend only to snap back inside grabbing orders before following through.

To avoid this you could:

• Have no stop loss, risk a margin call
  
• Have a very generous stop, more risk
  
• Have a tight stop, take many small losses
  

Over time I have whittled away my account due to scenarios like this time and time again.

Going forward I am only trading bounces meeting certain parameters:

• Minimum of 3 touchpoints per trendline
  
• Enter going towards the advantageous side
  
• Stop is outside the supporting trend
  

Risk management is crucial for any consistent winning strategy. With this I should be able to only enter trades when price is overextended, minimizing risk by having a tight stop outside these key trends. To where if price does go past, my strategy is actually invalidated and not just swept liquidity.