Of course, nothing is written in stone, and constant monitoring and adjustment are required.
The fact that we drew a trendline does not mean that prices will indeed reach 100%.
This is very important to understand. The slope of the trend may change at any time no matter what, and hence the trendline needs to be adjusted to reflect the new rate of ascending or descending.
For example, the trendline may become steeper or slower.
In the following example, the trendline labeled as 1 has been proven to be slow as prices accelerated and formed a new steeper trendline.
As a result, I am sure you will agree that we need to adjust the trendline.
The new trendline labeled with the number 2 is steeper, but is it sustainable?
Let’s take a look at an example.
This time the original trendline eventually turned out to be too steep, and instead, the slower prices formed a slower or flat trendline.
The new trendline labeled with the number 2 is drawn to reflect the new slope of the trend.
When a steep trendline is broken, usually a correction will be in place, and a new trend will follow at a less steep angle, and I may add more sustainability.
Of course, we cannot exclude a reversal or a trading range after a trendline violation.
In a nutshell, steep trendlines are easier to be violated.
Of course, a new question arises?
What is the best slope?
Well, according to W. D. Gann, the 45o degree angle is ideal for a sustainable trend, but this is another topic in its own right!