Question M15

Beginner Questions
1

Hi,

I read here once that there is no such thing as a stupid question, so here goes. In The 15 Min charts after a currency breaks out of it’s overnight range & then returns to a range, are we simply waiting for it to break out again before we should enter? I’m sure there is much more to it than just that, but on a basic level.

Thanks.

2

15m charts tend to be less reliable. meaning, breakouts are of less significance in comparison to longer term Time frames. What you can do in such a situation is zoom out and find out what that breakout means on a bigger time frame (1H or 4H). Did the breakout simply re-test a major trend line (on the 1H chart) and bounced from there back the (15 min) range? or was it a valid breakout and we are simply witnessing an accumulation phase, before the price rallies again, to confirm/validate the direction of the breakout?

3

What a brilliant answer, thankyou! All I have to do now is understand it, but I get your drift.

Thanks again.

4

Well yes, you can assume this idea as basis of some good technical strategy but you need to check history for consistency of this “ranging market condition”. For example if ranging in given price compass lasts for some good lapse of time, then the odds are higher that after breakout it will retrace to its previous field of fluctuations.

Most patterns are built on history statistics so any idea should be thoroughly collated with historical price behavior. Keep that in mind.

5

There’s usually a market factor behind that breakout, could’ve been a news event or profit-taking at the end of a trading session. It might be best to read up on what caused that move so you can be able to figure out if it will be sustained or not.

6

Thanks for your replies, I didn’t realise it was so straight forward :wink:

7

Keep it Simple !
There are 2 approaches to trading in general : Fast and Slow
Fast: Your system gives signal to trade-- you #YouTrade. Bang! No second thoughts!
Slow: Your system gives a signal to trade-- you wait for the confirmation of the signal( retest of the S/R zone) and #YouTrade!.Bang!
You will find over time which one plays nicer with your personality.
I always liked it slow:)
#TradeSafely