What Is the Trend Line Bounce Strategy

Two lows, a line, and a third touch

The trend line bounce strategy is built on a line and a touch. The line is a trend line: a straight line drawn through two lows of a rising price and carried on to the right, so it sits under the price like a floor. Take gold in the autumn of 2025. The lows were 3886.61 on 28 October and 3998.05 on 18 November, and a line through them rises 7.43 a day. On 21 November the day's low, 4022.41, came within 2.07 of the line, and the close, 4065.89, was 45.55 above it. A low that touches the line and a close that stays above it is what the strategy watches for.

A ball on a rising floor

Picture a ball bouncing up a rising floor. The floor is the trend line and each bounce is a low. The floor cannot be drawn until the ball has bounced twice, because a line needs two points; after that it runs on to the right, and the third bounce is the first one the strategy can watch for. The strategy waits at the floor. A day whose low touches the line and whose close is above it is the bounce. A day that closes through the floor is the end of the line, and the strategy stops watching that line and waits for two new lows to draw the next one.

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