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Need some help with trading breakouts

  • #21
  • Oct 8, 2018 6:48pm Oct 8, 2018 6:48pm
one of my techniques

https://www.forexfactory.com/showthr...0#post10164040
  • #22
  • Oct 8, 2018 7:15pm Oct 8, 2018 7:15pm
Mastering break outs:
It's as simple as this...
1.3111
to
1.3310

Attached Image (click to enlarge)
Click to Enlarge Name: break.jpg Size: 18 KB


Now you might think that's a sick joke. But there's no range in market prices that actually mean anything. There's not a single retrace moment that significantly makes a higher 'break' out. You can't use past data for much of anything. Sorry to burst the bubble.
So all of what you imagine can potentially screw you out of trades.

So let's take a look at at the deeper odds at play.
Attached Image (click to enlarge)
Click to Enlarge Name: odds.jpg Size: 111 KB
  • #23
  • Oct 8, 2018 8:04pm Oct 8, 2018 8:04pm
Quoting goodoboy
Hello, If you are price action trader, how would you trade the breakout attached. The red line is a key area of resistance that was broken. Price has been trending upwards. My thoughts are to take the long after price is rejected on the breakout resistance (now support). There are several candles there that rejected, which shows lack of selling pressure. Also when price returns to breakout level, a bullish engulf pattern occurs which signals price may be reversing back with the trend as buyers are buying this area. All in all, I would go long in...
Alright becos I am a pure PA trader trading ONLY on price level alone I will try my best to chip in my views on your question. First from your picture I am not able to tell you if its a breakout or just a spike in price. Breakout to me is when price make a higher high or lower low WITHOUT revisiting the high or low which was being breached. Spikes are normal PA trying to breakout but fail and its very common during rangey market condition which can go up 150pips and down again. In fact in the higher spectrum of rangey market its quite common to see price spike 500 pips and then change 350 pips in the opposite direction. So in order to understand PA it's imperative to know understand and aware what kind of market conditions you are trading in and also whether in which context of intra-day midterm or longterm perspectives. These are only the very basics in understanding the concepts of pure PA.
If you are looking for a short and precise answer to your wide question then i apologise to bore you with my long reply.

Cheers and trade happy.
  • #24
  • Oct 9, 2018 7:21am Oct 9, 2018 7:21am
Quoting kinspk
{quote} short consolidation zone,
Hello kinspk,

Thanks for the response.

Can you give an example or meaning of short consolidation zone?

Thanks
  • #25
  • Oct 9, 2018 7:26am Oct 9, 2018 7:26am
Quoting Swisse
Mastering break outs: It's as simple as this... 1.3111 to 1.3310 {image} Now you might think that's a sick joke. But there's no range in market prices that actually mean anything. There's not a single retrace moment that significantly makes a higher 'break' out. You can't use past data for much of anything. Sorry to burst the bubble. So all of what you imagine can potentially screw you out of trades. So let's take a look at at the deeper odds at play. {image}
Thank you Swisse for your explanation
  • #26
  • Oct 9, 2018 11:27am Oct 9, 2018 11:27am
Quoting goodoboy
{quote} Hello kinspk, Thanks for the response. Can you give an example or meaning of short consolidation zone? Thanks
Np. As for example of consolidation zones, i think you can search thru FF or google for more, that will be better. It's shouldn't be hard since you had joined FF for 4 years.
The only winner is the one who survive the longest...
  • #27
  • Oct 9, 2018 4:10pm Oct 9, 2018 4:10pm
Quoting genghistar
{quote} Alright becos I am a pure PA trader trading ONLY on price level alone I will try my best to chip in my views on your question. First from your picture I am not able to tell you if its a breakout or just a spike in price. Breakout to me is when price make a higher high or lower low WITHOUT revisiting the high or low which was being breached. Spikes are normal PA trying to breakout but fail and its very common during rangey market condition which can go up 150pips and down again. In fact in the higher spectrum of rangey market its quite common...
Thank you so much genghistar,

I am trying to learn to be price action trader as well.
  • #28
  • Oct 10, 2018 6:09pm Oct 10, 2018 6:09pm
Quoting Swisse
Mastering break outs: It's as simple as this... 1.3111 to 1.3310 {image} Now you might think that's a sick joke. But there's no range in market prices that actually mean anything. There's not a single retrace moment that significantly makes a higher 'break' out. You can't use past data for much of anything. Sorry to burst the bubble. So all of what you imagine can potentially screw you out of trades. So let's take a look at at the deeper odds at play. {image}
Your history here at FF speaks for itself. So......
  • #29
  • Last Post: Oct 12, 2018 12:11pm Oct 12, 2018 12:11pm
Quoting goodoboy
Hello, If you are price action trader, how would you trade the breakout attached. The red line is a key area of resistance that was broken. Price has been trending upwards. My thoughts are to take the long after price is rejected on the breakout resistance (now support). There are several candles there that rejected, which shows lack of selling pressure. Also when price returns to breakout level, a bullish engulf pattern occurs which signals price may be reversing back with the trend as buyers are buying this area. All in all, I would go long in...

The portion of the chart you show looks much like a classic bull flag, i.e. a big vertical rise (the flagpole) followed by some choppy consolidation candles in a tight range (the flag). There are various ways to look to play this:

1) Long on a new high. This is the 'classic' TA method. You are buying for further momentum on a new breakout but can easily be caught on a double top spike.

2) Long when price turns back up into the flag after testing a local (flag) low. This gives a better entry point and is trying to enter on renewed momentum after seeing the presumed end of the flag retracement. You can also move the stop up aggressively should it test the pattern high (where 1) would enter)

3) Going long at the bottom of the flag. This gives an even better entry price but risks entering on what might be the start of a sharp breakdown reverse.

4) For completeness, could also wait to see if it breaks down sharply after the flag consolidation, and then go short on the presumption it was a spike fake move.

Of the three I tend to go for 2) as being perhaps the best of both worlds, but I am partial to 4) as well. Not so keen on 1) or 3) but it's down to personal preference at the end of the day.
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