Three Line Break

Three line break charts usually help traders more accurately determine the current direction of the trend and alert them sooner when the trend has changed than do other methods (stochastics, moving average crossovers, etc).

Three line break charts display a series of vertical boxes that are based on the closing prices. Every time there is a higher close a new white bar is created. When the price closes below the low of 3 green boxes the trend shifts to down and we start drawing black boxes. Every new closing low draws a new black box and so on. Three point break charts often can help a trader spot trend reversals quickly. There are many uses for 3 line break charts, you can use them for entries, exits, and make wonderful places to trail your stops to catch the majority of the move.

An example trade, my long with the Euro FX Cme Future

Entry point at 1.3692, first white box, i managed to close before FED meeting at 1.3756

This chart was made in Amibroker, using tick visualization, every 16 base ticks one bar is drawn or every 16 base pip, it is a way to compact the chart and eliminate small congestion areas.