hey traders
i have recently encountered the world of breakouts and its been a fun learning experience but i feel that theres more to uncover. while back testing my system i found multiple set ups where price consolidated and began ranging. then the price moved to one side of the channel and then broke out and returned to restest previous the significant level. i would ready myself for a trade then BOOM it goes back and starts ranging again but it gave all signs that it would start trending.
My question is what parameters should i implement to qualify a real breakout. is it volatility? candle stick patterns? momemtum?
and is there a way to see that price will most likely fakeout and trade the reversal?
thanks in advance
Careful my friend, you have opened the door of your house to everyone in the street who thinks they have a secret answer. Or who thinks you will think they have a secret answer.
I know what you’re saying - at the heart of it you want to reduce the percentage of losing trades. There is nothing irrational about that.
But let’s assume that you actually already have more winning trades than losing trades. In that case, my advice is do not concentrate on the smaller proportion, concentrate on the bigger proportion. i.e. the winning trades, not the losers.
There is a lot of info on baby pips about this. Also google Bulkowski candlestick patterns. You can improve your chances of not taking the fake out if you learn to read candlestick and patterns. 80% right would be about the best you could ever hope for and that would take a lot of practice and experience.