So I'm studying box trading. From what I understand, find a range draw a box around it and trade in a direction of a break. Stop behind the box with tp being the size of the box away from the break, or trail behind future boxes that form if a strong direction develops in the favor of the trade.
The problem I see is how to avoid fake break outs? Just trading any break would be aggessive, but prone to false breakouts before the actual breakout, or even total reversals to the otherside of the box. I've thoght of a couple ideas.
1. Whatever time frame you are trading must close outiside the box for entry.
2. Wait for a break, retest of the edge of the box to show it is now support and enter at continuation.
If anyone trades boxes and can give me their input it would be much appreciated.
The problem I see is how to avoid fake break outs? Just trading any break would be aggessive, but prone to false breakouts before the actual breakout, or even total reversals to the otherside of the box. I've thoght of a couple ideas.
1. Whatever time frame you are trading must close outiside the box for entry.
2. Wait for a break, retest of the edge of the box to show it is now support and enter at continuation.
If anyone trades boxes and can give me their input it would be much appreciated.