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How Do You Identify A Fake Breakout?

  • #41
  • Feb 8, 2013 5:57am Feb 8, 2013 5:57am
Quoting Kanzler
Biggest load of paranoid ignorance I've seen today. Everybody thinks Wall Street and their broker are out to get them so they can excuse themselves of their poor trading performance. If you have a reputable broker your data feed is as live as you can get it.

Also, it's not possible to tell in real time if a breakout is going to get knocked down right after launch or not. A reputable member here once said (and I paraphrase) that "playing breakouts are like pissing away your money". Play the re-test instead.

yes i do play the re-test also. but if the breakout takes off, then no re-test. comes back to the point of this thread, how one can analyse if the breakout will take off or is a fakey.
  • #42
  • Feb 8, 2013 9:38pm Feb 8, 2013 9:38pm
Quoting whatfx
yes i do play the re-test also. but if the breakout takes off, then no re-test. comes back to the point of this thread, how one can analyse if the breakout will take off or is a fakey.
Knowing the answer to that question in real time is impossible.
  • #43
  • Feb 9, 2013 3:18am Feb 9, 2013 3:18am
Here's the real answer - No indicators

Use Pivots, this free How To Really Use Pivots eBook is excellent - http://forexuseful.com/product-categ...ex-free-stuff/

For example it tells me if the breakout level is on R2, there is a less than 13% chance R3 will be hit - No brainer - Fade the breakout

It also tells me that if price opened above the Pivot point today the chance of that R3 level being hit reduces to 8%

Greatly improved my breakout trading/fading.

Anyone else using have any tips please share.
  • #44
  • Feb 9, 2013 4:42am Feb 9, 2013 4:42am
Quoting whatfx
can you explain a bit more ? why is the first circle a fakey and the 2nd one not ?
The chart shows CP's proprietary indicator which he has not revealed the details of. He often states that price movement is caused by an imbalance between total money in and total money out. The indicator must have a way of measuring if this imbalance is large enough to result in an impulse wave that in the first example is not sufficient to overcome inertia but in the second example is sufficient and will be a breakout not a fakeout. Big disturbance means big money so he has a way of decoding these orders, measuring it and graphically representing as in the chart posted. Similar to orderflow or Wykoff markup/markdown before a strong trend
Audentes Fortuna Juvat
  • #45
  • Feb 9, 2013 5:47am Feb 9, 2013 5:47am
Quoting wilczek
Here's the real answer - No indicators

Use Pivots, this free How To Really Use Pivots eBook is excellent - http://forexuseful.com/product-categ...ex-free-stuff/

For example it tells me if the breakout level is on R2, there is a less than 13% chance R3 will be hit - No brainer - Fade the breakout

It also tells me that if price opened above the Pivot point today the chance of that R3 level being hit reduces to 8%

Greatly improved my breakout trading/fading.

Anyone else using have any tips please share.
The link that you provided requires registration to get the free ebook. Not wishing to open myself to loads of spam, I haven't checked it out.
Statistics obviously depend on the data source.
I have seen statistics that say that once R2 has been breached, there is a 40% chance that price will hit R3.
It's not something that I have compiled statistics for myself.
But a big difference to the 13% from your source.
Which is right? I don't know.
Have you actually verified this statistic for yourself in any way?
Please Do Not PM Me With Coding Enquiries
  • #46
  • Feb 9, 2013 9:17am Feb 9, 2013 9:17am
I can say I got this last year as well as some other stuff on there and all I have gotten is their newsletter each week (I used a unique email address for sign up), which usually has something in it that makes me think a little.

From the Pivots eBook is this "analysis was conducted over 12 years of data from the beginning of 2000".

The general stat for R2 being hit is around 33% and for R3 around 12%.

If S3 has been hit during the day the chance of R3 being hit is 0.10% so although rare, that for me is a definite breakout fade.

Just thinking out loud here, 12% is about 33% of 33% and on the basis R2 must be broken for R3 to be broken that is not too far off your statistic of 40% - Is it not?

I have not personally verified the data - How did you verify yours?
  • #47
  • Edited 12:15pm Feb 9, 2013 11:53am | Edited 12:15pm
You can't predict it. No voodoo indicator can tell you what it's going to do. No detailed statistical analysis is going to give you any better odds on it. The reason you have such a hard time with this endeavor is that you're not comfortable taking a risk. You want to "filter out" all the risk. It's not possible, so learn to live with it.

Quoting Trading In The Zone by Mark Douglas
"Watch this." He picked up the phone, called one of the clerks handling orders for the soybean pit, and said, "Sell two million beans (bushels) at the market." Within thirty seconds after he placed the order, the soybean market dropped ten cents a bushel. The chairman turned to look at the horrified expression on the analysts face. Calmly, he asked, "Now, where did you say the market was going to stop? If I can do that, anyone can."
  • #48
  • Feb 9, 2013 12:12pm Feb 9, 2013 12:12pm
I have heard good things about this, STC_COLORmod.mq4, but I don`t have own experience with it.
  • #49
  • Feb 9, 2013 12:32pm Feb 9, 2013 12:32pm
It looks good.
Here is EU-M5 from thursday, yellow lines asian high&low, first red line London open.
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  • #50
  • Feb 11, 2013 7:21am Feb 11, 2013 7:21am
Quoting juhanimi
It looks good.
Here is EU-M5 from thursday, yellow lines asian high&low, first red line London open.

not sure what could things you heard, but its a lagging indicator.
  • #51
  • Feb 11, 2013 7:52am Feb 11, 2013 7:52am
Quoting wilczek
I can say I got this last year as well as some other stuff on there and all I have gotten is their newsletter each week (I used a unique email address for sign up), which usually has something in it that makes me think a little.

From the Pivots eBook is this "analysis was conducted over 12 years of data from the beginning of 2000".

The general stat for R2 being hit is around 33% and for R3 around 12%.
Quoting wilczek
If S3 has been hit during the day the chance of R3 being hit is 0.10% so although rare, that for me is a definite breakout fade.

Just thinking out loud here, 12% is about 33% of 33% and on the basis R2 must be broken for R3 to be broken that is not too far off your statistic of 40% - Is it not?

I have not personally verified the data - How did you verify yours?
I have not verified the data. My post is reproduced below.....

"I have seen statistics that say that once R2 has been breached, there is a 40% chance that price will hit R3.
It's not something that I have compiled statistics for myself.
But a big difference to the 13% from your source.
Which is right? I don't know.
Have you actually verified this statistic for yourself in any way? "

I was simply pointing out the difference of statistics from different sources. Makes it difficult to know what to believe.
Please Do Not PM Me With Coding Enquiries
  • #52
  • Feb 11, 2013 9:44am Feb 11, 2013 9:44am
Quoting whatfx
not sure what could things you heard, but its a lagging indicator.
Okey, I believe you.
  • #53
  • Feb 11, 2013 12:27pm Feb 11, 2013 12:27pm
Quoting Gumrai
I have not verified the data. My post is reproduced below.....

"I have seen statistics that say that once R2 has been breached, there is a 40% chance that price will hit R3.
It's not something that I have compiled statistics for myself.
But a big difference to the 13% from your source.
Which is right? I don't know.
Have you actually verified this statistic for yourself in any way? "

I was simply pointing out the difference of statistics from different sources. Makes it difficult to know what to believe.
No probs, I was simply pointing out that the difference is not so big if my "deductions" are correct, perhaps some mathematician can confirm my "deductions"?
  • #54
  • Feb 13, 2013 8:41am Feb 13, 2013 8:41am
  • #55
  • Feb 14, 2013 9:42am Feb 14, 2013 9:42am
are there not many people out there that have good techniques to deal with or identify fake breakouts ?
  • #56
  • Feb 14, 2013 9:57am Feb 14, 2013 9:57am
Quoting whatfx
are there not many people out there that have good techniques to deal with or identify fake breakouts ?
There are about 149,000,000 opinions on the net. In Google, anyway. Maybe one of them has the answer? If you go to Forexhard's thread, I think it's called something like "stairsteps break outs", they have a novel way of dealing with it called "anti hedging". Basically it means keep taking a trade either side of your range until one covers all your losses and gives the original profit. You can do this without boxing a range. Just choose a (small) profit target and set a trade. It doesn't matter whether it is long or short. If it wins go to your next one. if it loses set one in the other direction to cover your loss and make your original target. There's even a thread on that. I can't remember the name of it, though. What you are asking for is basically the holy grail of forex, because every trade is a break out off a line. So. Are you going to call it a draw, or carry on calling us a bunch of twats?
Gone to a better place
  • #57
  • Feb 14, 2013 10:23am Feb 14, 2013 10:23am
Quoting smikester
There are about 149,000,000 opinions on the net. In Google, anyway. Maybe one of them has the answer? If you go to Forexhard's thread, I think it's called something like "stairsteps break outs", they have a novel way of dealing with it called "anti hedging". Basically it means keep taking a trade either side of your range until one covers all your losses and gives the original profit. You can do this without boxing a range. Just choose a (small) profit target and set a trade. It doesn't matter whether it is long or short. If it wins go to your...
not at all.
  • #58
  • Feb 14, 2013 2:16pm Feb 14, 2013 2:16pm
You have already been given loads of responses......what exactly is it you are looking for? Can't you accept that it probably isn't something that you can 100% identify?

I still stand by my advice earlier in this thread......before a breakout, look to the left to see if there are any obvious price levels that price could bounce from. Don't take a breakout into one of those levels.

Spend some time studying your charts, and Price Action around breakouts and see what ( if any ) the differences are between successful breakouts and the false ones. On the False ones, look to the left and see why price bounced back into the range etc. The answers are in your charts. Study them instead of looking for answers here.

There is no way 'to identify a false breakout' before it happens.
- Look to the left, Trade to the right - I am the system
  • #59
  • Feb 14, 2013 3:11pm Feb 14, 2013 3:11pm
Quoting Sebastiaan76
You have already been given loads of responses......what exactly is it you are looking for? Can't you accept that it probably isn't something that you can 100% identify?

I still stand by my advice earlier in this thread......before a breakout, look to the left to see if there are any obvious price levels that price could bounce from. Don't take a breakout into one of those levels.

Spend some time studying your charts, and Price Action around breakouts and see what ( if any ) the differences are between successful breakouts and the false ones....
There's a reason so many people lose their money here. I still say that trading initial breakouts is nothing more than pissing your money away.
  • #60
  • Feb 18, 2013 5:46am Feb 18, 2013 5:46am
Quoting smikester
There are about 149,000,000 opinions on the net. In Google, anyway. Maybe one of them has the answer? If you go to Forexhard's thread, I think it's called something like "stairsteps break outs", they have a novel way of dealing with it called "anti hedging". Basically it means keep taking a trade either side of your range until one covers all your losses and gives the original profit. You can do this without boxing a range. Just choose a (small) profit target and set a trade. It doesn't matter whether it is long or short. If it wins go to your...

i will have a look at stairsteps breakout. but from what you are saying, it appears you hedge until profit occurs, or its similar to murray maths. both a big no no for me iam afraid.
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