How recognize false and right breakout of support or resistance level. | Forex Factory

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How recognize false and right breakout of support or resistance level.

  • #1
  • First Post: May 22, 2007 12:52am May 22, 2007 12:52am
Hi, guys!
I’ve recently started on Forex with a book of J. Murphy “Technical Analysis of the Financial Markets”. But my trading is a bit disappointing, may be I didn’t quite get the essence of the analysis. Could anyone advice me some good books to read, please?

Also tell me please when breakout of support or resistance level could be false, and when it is right breakout
  • #2
  • May 22, 2007 3:23am May 22, 2007 3:23am
First of all, what do you consider support/resistance? I mean, what tools do you use to label one particular level as such?
  • #3
  • May 22, 2007 5:44am May 22, 2007 5:44am
Quoting Insane
Hi, guys!
I’ve recently started on Forex with a book of J. Murphy “Technical Analysis of the Financial Markets”. But my trading is a bit disappointing, may be I didn’t quite get the essence of the analysis. Could anyone advice me some good books to read, please?

Also tell me please when breakout of support or resistance level could be false, and when it is right breakout
From the way i trade, I am very conservative as to what constitutes a break. If the price close another session beyond s/r, then my perspective change from a swing trader to a trend trader. I determine s/r from the weekly and monthly, and trade from the daily

But if price breaks s/r, I usually wait, because from my limited experience, it would usually shoots back into range.
  • #4
  • May 22, 2007 6:14am May 22, 2007 6:14am
Quoting merlin
here is a little secret, and it will be very usefull if you know what to do with it...

dont take a breakout unless it follows a false breakout.
This is pretty good advice.

I tend to use a range of things myself. Price action, macd, stochastic, ma's, keltner channels and a few others.
  • #5
  • May 22, 2007 8:26am May 22, 2007 8:26am
I remember the days {before this fast & furious market today} when a breakout was only confirmed After The Third Close Beyond.
  • #6
  • Last Post: May 22, 2007 8:32am May 22, 2007 8:32am
Quoting Bemac
I remember the days {before this fast & furious market today} when a breakout was only confirmed After The Third Close Beyond.
Today is a little bit different A breakout is confirmed after the third close beyond, but beyond what ? Obviously not beyond trend line Personally I consider MA lines the best trend line ever.

These days if you want confirmation above or beyond trend line you must wait at least 5 candles in that direction and each one of them to close above or beyond

All the best.
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