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How do you trade breakout without bleeding to death?

  • #61
  • Sep 22, 2015 9:47am Sep 22, 2015 9:47am
Quoting lkthomas
So, the top red arrows showing I did a long and cut loss, the bottom arrows showing I did a short and cut loss. Then finally last candle breakout and I did a long trade, start earning money. The problem is, on market swinging like the one I highlighted, how to avoid lost? Or, how do I know if it's ranging? I have been testing ADX and seems not useful at all. {image}
I see a range until the last bullish engulfing candle forms. For a breakout to form, you need a clear candle closing outside the established range and the tighter is the range (low volatility) the higher the true breakout probability. I use Bollinger Bands which help in identifying ranging market being almost horizontal then.
  • #62
  • Sep 22, 2015 9:52am Sep 22, 2015 9:52am
Quoting lkthomas
So, the top red arrows showing I did a long and cut loss, the bottom arrows showing I did a short and cut loss. Then finally last candle breakout and I did a long trade, start earning money. The problem is, on market swinging like the one I highlighted, how to avoid lost? Or, how do I know if it's ranging? I have been testing ADX and seems not useful at all. {image}
What pair and what timeframe is this?
  • #63
  • Sep 22, 2015 9:56am Sep 22, 2015 9:56am
Quoting hytten
{quote} What pair and what timeframe is this?

Hang Seng Index, 5 minutes.
  • #64
  • Sep 22, 2015 4:26pm Sep 22, 2015 4:26pm
Quoting lkthomas
{quote} Hang Seng Index, 5 minutes.
oh wow..5 mins..very exciting unfortunately that is expert level. If you new to this.. i think u need to start from level 1.. daily chart...like you play a game.. level 1 is slow.. boring slow..

make your money the boring way and use the money to pay for roller coaster ride for the excitement.. making money should be boring.
  • #65
  • Edited 11:58pm Sep 22, 2015 10:53pm | Edited 11:58pm
Carrying forward my comments about timing...
I find it harder to have good BO trades wed. and thurs., the PA often tends to go in the intended direction.... eventually, but the stop hunts are often more cruel and volatile. This is what I envisage, not saying it's right but it's just a story that explains PA as I see it.

The "Money" now has better idea of where PA is heading (compared to Mondays and Tuesdays) and can now afford to push around the micro levels without the fear of being trapped themselves in the wrong direction. Be wary of being caught in the wrong direction Wed, and Thurs.
As the lights go by so too do the shadows move
  • #66
  • Sep 23, 2015 6:01am Sep 23, 2015 6:01am
Attached Image (click to enlarge)
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  • #67
  • Sep 23, 2015 3:57pm Sep 23, 2015 3:57pm
Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_734 Sep. 24 04.56.jpg Size: 114 KB


Risk 40 pips. Closed with profit 80 pips.
  • #68
  • Sep 23, 2015 4:13pm Sep 23, 2015 4:13pm
Quoting CrucialPoint
How do you trade breakout without bleeding to death? {image} I babysit my trades Cut my losses Would you leave your baby for a hour, 4hr, 12hrs, a day, a week? So why would you put a stop loss and walk away? A stop loss is for an emergency. A stop loss wasn't designed so that you throw accountability out the window. If your trade is in profit and the wind has changed in the opposite the direction, you should be closing your trade. Instead, you are nowhere to be found and the whole thing turns around and hit your stop loss. Peace, CrucialPoint...
we don't predict, we only ride
  • #69
  • Sep 23, 2015 10:42pm Sep 23, 2015 10:42pm
Quoting hytten
{quote} oh wow..5 mins..very exciting unfortunately that is expert level. If you new to this.. i think u need to start from level 1.. daily chart...like you play a game.. level 1 is slow.. boring slow.. make your money the boring way and use the money to pay for roller coaster ride for the excitement.. making money should be boring.

I think daily chart swing too much, I just don't have that much margin to sustain the swing. But good point, now I am looking at higher time frame before entering the trade on HSI
  • #70
  • Sep 23, 2015 10:43pm Sep 23, 2015 10:43pm
Quoting hytten
{image} Risk 40 pips. Closed with profit 80 pips.

Did you draw purple link by yourself or your EA does that?
  • #71
  • Sep 23, 2015 11:26pm Sep 23, 2015 11:26pm
Quoting lkthomas
{quote} Did you draw purple link by yourself or your EA does that?
Purple and orange line is an inside bar indicator.
  • #72
  • Sep 23, 2015 11:41pm Sep 23, 2015 11:41pm
Quoting lkthomas
{quote} I think daily chart swing too much, I just don't have that much margin to sustain the swing. But good point, now I am looking at higher time frame before entering the trade on HSI
I don't do this because lower time frame too many false signal plus higher time frame gives me time to do other enjoyable things, so i lower my lots and go on higher time frame instead but I happen to see this so I screen shot for you... 30 min as my higher timeframe since you trade on 5mins chart. Know where to look the movement is fast. Lower time frame also more "expensive" to trade since we will need to break even the spread b4 it is profit. 20 pips movement and 5 pips of spread is 25%.. very expensive to me

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  • #73
  • Sep 27, 2015 11:48pm Sep 27, 2015 11:48pm
Back to timing again. The NFP week is difficult to find a reliable BO move. There are many FO's / false moves. I have story to this one too
Because it is EOM the market thins out while it waits for big news and direction. During this thin market the algo's have a field day by being able to move the market creating fake patterns / signals to sucker in the unwary. Like I've said before I'm not saying this is what really is happening but it's just a way I use to illustrate to myself for what to expect... who really knows why it works like that
As the lights go by so too do the shadows move
  • #74
  • Sep 28, 2015 4:19pm Sep 28, 2015 4:19pm
Interesting question.

I never take a trade without have made some analysis before.

You can optimize your entry just looking at the trend of the previous 2-3 days. Now, it's obviously a larger argument, but generally if the trend is clear you can trade every breakout in the direction of the price and be statistically profitable.
It's not over, until I win.
  • #75
  • Sep 28, 2015 7:26pm Sep 28, 2015 7:26pm
Quoting ItaTrader93
Interesting question. I never take a trade without have made some analysis before. You can optimize your entry just looking at the trend of the previous 2-3 days. Now, it's obviously a larger argument, but generally if the trend is clear you can trade every breakout in the direction of the price and be statistically profitable.
Incorrect. BO's occur most often from consolidation area's (at the top or bottom of a trend) in area's of support or resistance. It is in these places that a trend has the biggest potential of reversing. Much of my BO trading involves the swinging of a trend. It depends on the BO. For example if it was a Flag at the bottom of a trend, then yes the chances of the trend continuing are high. If it is a H&S BO then obviously looking for the reversal.
As the lights go by so too do the shadows move
  • #76
  • Sep 29, 2015 8:46am Sep 29, 2015 8:46am
Quoting Matts Micro
{quote} Incorrect. BO's occur most often from consolidation area's (at the top or bottom of a trend) in area's of support or resistance. It is in these places that a trend has the biggest potential of reversing. Much of my BO trading involves the swinging of a trend. It depends on the BO. For example if it was a Flag at the bottom of a trend, then yes the chances of the trend continuing are high. If it is a H&S BO then obviously looking for the reversal.
As I said, it's a much larger argument. Whatever type of movement you can think have to be contextualized, but generally, you can earn good money also trading the BO in a market with a clear up/down trend.

It takes a medium stoploss (10/15 pips) and a good exit strategy, but it works.
It's not over, until I win.
  • #77
  • Sep 29, 2015 8:54am Sep 29, 2015 8:54am
Quote
How do you trade breakout without bleeding to death?
Backtest your strategy and adjust your trade size accordingly. If your strategy does not have a positive expectancy then design another.
  • #78
  • Sep 29, 2015 9:19am Sep 29, 2015 9:19am
Quoting ItaTrader93
{quote} As I said, it's a much larger argument. Whatever type of movement you can think have to be contextualized, but generally, you can earn good money also trading the BO in a market with a clear up/down trend. It takes a medium stoploss (10/15 pips) and a good exit strategy, but it works.
I agree, it is easier to trade a BO when there is a trend but it's not always "with" the trend. Imo the best BO's that have the most potential to move are swing BO's. Trades taken at the top or bottom of a trend are more likely to be FO's.
As the lights go by so too do the shadows move
  • #79
  • Dec 8, 2016 3:37am Dec 8, 2016 3:37am
My golden rule is B/o, Pullback then I will put my entry. (This method come from Babypips.com)
Frm there, let the market decide
Let Market Tell You
  • #80
  • Dec 8, 2016 7:14am Dec 8, 2016 7:14am
Quoting lkthomas
Folks, recently I have been trying to trade breakout method and it seems very effective, but one problem is that all major breakout comes from a ranging market, and during ranging market, it swing so much that my position would have been hitting cut loss point. Now I am trying progressive approach, which means open a small position first, when breakout is confirm, open some more, so even it's bleeding due to market swing, loss would still be manageable. What's your method then? want to improve my method a little bit, thanks.

Which kind of breakouts are you talking about? News breakouts? Cutting through key S/R levels or smth else? They are all different in terms of how to manage them.
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