1) Re the critical differences between trend lines 1 & 2, trend line 1 could yet prove correctly identified (whatever its final placement), if the stock were to trade below point A. (Based on the pattern, I believe this unlikely.) However, even should that occur, note the lessening of the rate of decline, a clue in itself. (This last comment is fodder for yet another post; not here!)
2) There are exceptions to the 'rules', as you would think. The primary exception is the divination and delineation of an area pattern (vs the delineation of a trend). The WebSense/WBSN chart pattern has both, which is one reason I share publicly the opportunity.
3) And then there is (All) Allan, who keeps me on my toes :-)
Be careful. There is a difference between a breakout from a line of declining tops that is indicative of, and prefatory to, a change of trend, and the breakout from a trend line of declining tops that signals the resumption of the uptrend, and quick gains ahead. The first typically leads to "filling" the chart (and dashed expectations for the trader), the second leads to... well, quick upside fulfillment. (These 'rules' apply equally to the obvious: breakdowns; trend changes from up to down.)
"I've been applying your rules to my charts, coming up with different trend lines then before and most, if not all, appear to give better entries on break-outs."
For example, the correctly identified trend line 2 on the WBSN chart changes the trend from down to sideways. The investor has ample time and opportunity to purchase at equally good prices while the area pattern builds. This all has to do with the tilt: placing (and perceiving) the pattern and its setup within context, which requires spatial awareness, fodder for yet another blog post. Or consider Apple/AAPL, which is a reversal of this typical reality. Its pattern and set-up build before the breakout from the primary line of declining tops. So when that line is finally breached, the shares will really scream higher; immediately and quickly.
My point is to divine what you (i.e., each of us) seek when buying: is it to buy at the lowest price with the least risk albeit less immediate big reward? or to buy at a marginally higher price with slightly greater risk but that likely would result in larger price gains achieved more quickly?
To each his own. (I do all, but then I know what I do, why I do it, and how to do it.)