What it looks like
In a rising market, join the last two higher swing lows with a straight line and extend it to the right. The line has held every dip during the rise. A candle then closes below it. Later, price comes back up to the line and fails to get back above it.
What it means
The line that held every dip during the rise has been crossed, so buyers are no longer stepping in on schedule. That alone only means the rise is weakening. A retest from below that fails is the first sign that sellers will defend the broken line.
How to trade it
- 1
Draw the line through the last two rising swing lows.
- 2
Confirmation: a close below the line, then a retest from below that fails.
- 3
Entry: sell as the retest holds below the line.
- 4
Stop: above the last swing high. Example on US30: line at 47,000 when broken, retest at 47,010 fails, last swing high 47,180. Sell at 46,990, stop at 47,200, a 210 point risk.
- 5
Target: the last swing low inside the rise, or 2 times the stop.
A close back above the line.
Where it works best
On 1 hour to daily charts after a steady rise with clean, respected swing lows.
WickSpeak spots uptrend line breaks automatically and labels them on the candles that made them. Each note explains what the break means, how to trade the retest and that a close back above the line proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Reading the break as a confirmed downtrend.
- Selling the first close below without waiting for the retest.
- Drawing a line so steep that any pause breaks it.
Related patterns
Questions traders ask
What happens when an uptrend line breaks?
The rise has lost the support that held every dip. It often leads to a sideways phase or a deeper pullback, but it is not proof of a downtrend.
How do you trade an uptrend line break?
Wait for the retest: price returns to the line from below and fails. Sell there with a stop above the last swing high.
What proves the break wrong?
A close back above the line, which puts the rise's support back in play.
Is a trend line break the same as a change of character?
They are related. A trend line break crosses a drawn line; a change of character breaks the last swing low itself, which is a stronger sign.