Student’s Question:
I really didn't understand what exactly you mean by "we need three touches of price action for a support line" could you please break it down for me.
Power Course Instructor’s Response:
For a support line to be valid, we need two points and then we would trade on third test of that line.
The first point of any line is simply a random point on a chart. When a second point appears, no matter where it appears on the chart, it can be connected to the first by a straight line but that really tells us nothing. When the third point occurs and it can be connected by the same straight line that connects points 1 and 2, now we have something that we can trade from.
See the chart below for a visual...
