The 2-hour chart clearly shows a downtrend. Sometimes, an entry is taken when a strong green candle forms with high volume, but the next candle turns weak and moves downward again. How can we determine a reliable confirmation for an upside entry to avoid false breakouts? What indicators or patterns should be considered?
Volume? 
Spot forex CFDâs donât have volume available, because itâs a decentalized market, with no way of monitoring or recording volume.
After two consecutive bars each close above the high of their penultimate predecessor.
Honestly, there are 100 different answers to the question youâve asked in the thread-title, all with relative merits and demerits. The one Iâve offered above is just one of them, but I think itâs not a bad one at all. Itâs not mine. Itâs from an old textbook by Tushar Chande. Just to set the ball rolling for you. 
By the way: you might want to be aware (if youâre not already?!) that trying to find entries like this - i.e. upside entries after a downtrend and vice-versa - tends to be a more-risky-than-most way of trading, because although they can sometimes run for a long way when you hit a good one, you also inevitably hit a lot of bad ones, i.e. false alarms.
So, if youâre going to try to trade these, itâs really important to cut losses short with tight stop-losses and let profits run. (And this was actually part of the point Chande was making in his book). These are fairly high-R, low-win-rate trades.
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You maybe need to stop looking at entries that are âvolume-based,â @swap13 , because it isnât real volume, as Theo says above.
The only âvolumeâ figure that any CFD broker can give you is the volume of their own customers, because they donât have access to any other information, just like you donât and I donât and even Theo doesnât.
Be aware that CFDs are not real âtradingâ: no currencies are changing hands; weâre just betting on the price-movements of an artificial âproductâ created by your own âbrokerâ (who is actually a counterparty, not really a broker at all) so that their customers can bet on its price movements. âVolumeâ canât help with that!
If this is news to you, the link below will help -
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You have a choice with reversals. You can either take the very first signal and potentially get a huge dramatic move in your favour, but probably price will revert to going south. Or you can wait for confirmation and miss out on some of those pips, but probably win. When running such trades I wait for the bottom and then start looking for a new higher bottom signal, so that price has made a new support level above the bottom of the initial V-shape, and then get long as it rises from the higher low: some pips are missed but you more often get a winning trade.
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Look at this chart
See that red Marked Zone?Price found a bottom,bounce,and then held a higher low before pushing up ,
Thatâs your real signal,not just the first green candle .
Simply look at COT REPORT is early sign of bullish divergence form if yes then wait for CHoCH and after place entry at discount zone using OB or FVG
Hi PHT,
So indicator that is volume-based such as Volume Profile, VWAP, Volume Spread Analysis etc. are not that âreliableâ or effective as described?
I get the basic theory, you know? Downtrend means lower highs and lower lows, and uptrend means higher highs and higher lows. But when Iâm actually looking at the charts, itâs hard to tell when itâs really safe to go long after a downtrend.
Iâd really appreciate any insights on how more experienced traders handle this situation.
My âpolicyâ is buried in my too-long, too-complicated post above, but itâs really dead simple: after a downtrend I donât go long until after two consecutive bars each close above the high of their penultimate predecessor.
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You have a choice depending on how aggressive you want to be. The first choices are most aggressive, the later choices are less aggressive -
- buy as soon as you see the uptrend
- buy when you see price rise above a new high in the uptrend
- buy when price is in an uptrend but has fallena little bit
- buy when price has fallen a long way but the uptrend line or channel or a supporting MA is still unbroken
- buy when price rises from a new low in the uptrend, but the low is still higher than the previous low
There is no right and wrong. All these entries can make the same amount of profit. It is a question of how much risk you wish to accept.
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E
specially with the tricky 2-hour chart. To avoid getting caught by false breakouts, donât just trust a single strong green candleâlook for added confirmation like a candle clearly closing above previous resistance or breaking a trendline. Indicators like RSI or MACD showing bullish divergence can help confirm the strength, and checking volume is crucialâa real breakout usually comes with sustained higher volume. Wait for confirmation candles after the initial green candle to see if the buyers stay in control. Patience here saves you from getting trapped!
Hey @TheodoreThring and @tommor, thanks so much for the detailed explanations! Theodore, your âtwo consecutive bars closing above the previous highâ rule sounds really concrete and like a good way to avoid getting faked out early. @Tommor, laying out the different entry points based on risk tolerance is super helpful â it makes me realize there isnât just one ârightâ way, but itâs about finding what Iâm comfortable with as I learn.**
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More importantly than that, youâre also clearly developing the skill of deciding who to listen to and learn from, and in the long run thatâs a much more valuable thing to acquire than the answers to any indicidual, specific question. 
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Could you elaborate on how you manage the position from there?
Thereâs no way to know with any certainty, but you can take a set of samples by following fixed criteria.
For example:
I knew a trader that would look at candle charts, and using the 9-EMA (Close), he would identify the setup approach as when a candle would not touch the EMA, then enter on the break of the lowest/highest candle that (obviously) didnât touch the EMA. Iâve illustrated the example on XauUsd Daily Candle chart.
There are infinite ways to go about identifying entry. This was what one trader felt for his style. He would actually look at the Weekly candle charts, enter, and wouldnât Take Profit, focused on cutting his losers short when the trade reversed on him. That was comfortable for him though.
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