Hi,
I kinda like this breakout-based strategy:
It’s possible to catch nice trades, like here:
but sometimes there are fake breakouts, for example:
I am looking for a way to filter them and avoid these fakeouts. Ideas?
Hi, fake outs are part of trading, and you can’t avoid it. Regards Greg
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If there was a way to accurately identify fake-outs, then it would also identify false fake-outs. But false fake-outs are the winning trades, so the question is, is there a way to accurately identify winning trades. And the answer is no. Don’t be sucked into thinking that if you only had more data you could do this - that is simply false.
You cannot know what the market will do, but the value of charts lies in telling you what you should do.
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Not possible. No filter needed. You’ll be filtering out good trades as well.
I doubt there is a way to validate fake outs properly, best you can do is to stick with your analysis and give it a go if everything looks according to your plan.