I shared a gold chart for the 1-hour time frame. I missed the trendline breakout because I was working and didn’t have enough time to watch the screen continuously. So, how can I identify such breakouts in the future while managing my job?
Secondly, I’ve read that when a breakout happens, you shouldn’t enter immediately. Instead, wait for a retest of the trendline before taking the entry. But in this scenario, the price didn’t retest—it just formed a strong candle with high volume. So how can I confidently enter in such cases? How do I know it’s not a fake breakout?
One way you could do this is place a buy order at the high of the red candle when it closes with a stop loss at the low.
I’d probably favour buying below the previous bar’s low, which would have been on the 2nd green candle, but that would probably warrant a bigger stop loss. That’s a more favourable entry technique for me because if you’re right, you can move your stop loss to break even quickly.
My suggestion might be kinda’ dumb but it’s what I do in crypto and it’s been working for awhile. But it is technically “adding to losers” so I’d be curious to hear what some of the vets have to say.
If I like this breakout, I would buy with 10% of my max position on the next candle or two (if my FOMO is too bad, I will just grab a market order).
From there, I’d layer in limit orders based on HORIZONTAL support and resistance, guided by my diagonals. In this case, the bottom of your box is a little lower than I would go… because I’d stop out with a close below either diagonal or a wick below the April 8 low.
I would also look for areas to add to that 10% if there was no retest but I am not as good at this yet.
If you’re going to add to losers in a leveraged market, I’d suggest you trade very small and only add once at the next level of market structure. But don’t expect both positions to be winners, I’d be looking to get out at breakeven on the loser.
The most important thing is that both positions together don’t go too big into the red. You’ll have more winners this way, but it’s a lot more risky. Not really something I’d recommend.
