so I’ve been getting stuck at this situation that’s causing me to lose trades: breakout from a range.
I trade on the M15 candles, but draw H1 and H4 support and resistance areas. It’s really effective in seeing where potential obstacles may be, as you may be trading directly into a higher timeframe’s support and resistance.
HOWEVER, I keep getting stopped out when I’m attempting to trade a breakeout,… even when I wait for the retest.
Here are two scenarios to show you what I mean:
Example 1) 5th July 2018 14:30 (UTC +2)
My setup in this case is when EMA 10 (blue line) touches the candlesticks bar. I made sure that EMA 10 was respected by the market, double checked market structure, for lower highs-lower lows. Add in trendline for added confluence. I decided to take the signal because I saw double pin bars forming around H1 support-turned-resistance… but still lost. It turned out to be a false breakout in this case
My setup in this case is when the EMA 20 touches the candlestick bars. Add in broken H1 support (blue line), trendline and 50% fibs for added confluence. In this case there were 2 spinning tops, 2 inverted pin bars. In this case, I was stopped out by the wick of the candle. Lol.
Hence my questions are:
How are you guys trading a breakout?
Is there a way to tell a false breakout from a real breakout in advance?
Do you find that it’s necessary to set wider stop losses for range breakouts? My theory is that because the two camps are fighting (i.e. false breakout vs real breakout guys), the volatility is higher hence SL needs to be higher.
For me the breakout has to be out of the consolidation. Neither example displays any decent consolidation to break out of. I am talking about PA consolidation and not necessarily candlestick patterns.
I’m not sure what strategy you’re using. You mentioned breakouts, but I’m not seeing a breakout. Then you talking about a trendline, fibs, pin bars, ema bounces. You need to be absolutely precise about why you are taking a trade and should be able to find that trade multiple times to have a strategy. Otherwise you are trading by discretion everytime, which is absolutely fine but then you will not be able to test this system.
breakouts happen all the time, so I’m sure you’ve seen them. Whenever you see price make an impulsive move out of a major zone/level/or whatever you refer to it as, then that’s considered a breakout
I meant, I couldnt see the breakout he was trading in the 2 charts he posted. And if he was trading breakouts then he was mentioning a lot of other strategies which were maybe complicating the trade.
When I think about breakouts, they should be clean and simple and obvious that we can all see them. Because if we can all see them others can too and theyll be buying or selling at the same time. Let the market do the hard work. The chart you posted is a bit complex for me too lol. But as long as it’s a method you’ve worked on, that’s good enough to be successful.
dude, that s a very small consolidation that usually results in trend continuing unless it s at a major weekly daily support, u have divergence, and every time price attempts to make a new low it s getting bought up, now that s when u know u aren t supposed to go short anymore. as for these small ranges if u wanna trade them, look for the fake move up if ur in a down trend, price most of the times fakes and then resumes (upthrust) and a fake move down if ur in an uptrend (spring). these fake moves usually mark the end of a consolidation(range) and price continues after that(that goes for any type of range).
i think u can see my point, and ofc there are variations cos market never quite does what u want, but if u learn to trade these u won t need anything more(theis goes for all timeframes btw). hope this helps cheers
So what you are saying is to look for the fake out, because price normally resumes it’s upwards trend right?
Question- in the second screenshot (the one with 3 rectangles), price evidently didn’t continue the upward trend. Isn’t this contradicting what you just said?
the 1 and 4 hr tmf were in a downtrend, that was just a pullback, u should look to sync with the higher timeframes always when choosing a direction. if u know for ex 4hr or 1hr is down and u have an up move on 15m look for the fake ups and get in with the trend. that s what i wanted to ilustrate
