Indicators for breakout

[counter_violent]

Don't care ! :cheesy: You guys trying to confound me with all this high fallutin' language?

I use them to trade and they work.

BTW, I've been out all day and I'm a little bit merry because I've been celebrating some of the divergences I've been having this week.

Split

If you start to see divergences when driving ...pull over for goodness sake

cv

 

[firewalker99]

You take it anyway, because you have no way of knowing whether price will barrel through the next level or not.

Db

I guess you can never know for sure, but aren't the odds against you when you trading a break of resistance in a situation where you know that price most likely will run out of steam?

For instance, I have three situations where I would think that trading the break is not a high probability thing to do:

a) the next resistance is very close if you look at a higher time frame
b) price might be bumping into resistance because of the daily range of that particular instrument: it's already been attained when the market finally breaks resistance
c) time is close to the EOD and there is little time left for the market to make much of an advance

I realize that these might be somewhat subjective (especially (b) as on some markets this seems to be much more flexible than on others), but why not "filter" some instead of "take it anyway"?

 

[rathcoole_exile]

Whatever it is, there's plenty of it about. I enclose ten days of October and as a Freebie, there's one for Monday on the end.

have to agree with you on every one of these. I think the only difference between us may be the period of our RSI

keep up the great work

 

[millsy500]

If you trade a breakout of resistance and don't know volume then you might have a problem. What if the breakout is fake? Resistance is a zone and not a specific price ,so a res just above your resistance line could in fact be the same. Would it not be better to wait for the breakout to be confirmed and then maybe trade the test of new support. All imo.

 

[TheBramble]

I've been celebrating some of the divergences I've been having this week.

Way to go Split, no point hiding in a closet....

 

[TheBramble]

I guess you can never know for sure, but aren't the odds against you when you trading a break of resistance in a situation where you know that price most likely will run out of steam?

Waiting for a re-test will keep you out of many breakouts. It will also keep you out of many failed breakouts. Fewer trades taken; Higher number of winning trades. Larger pW/pL = lower risk = bigger position = bigger profits.

 

[firewalker99]

Waiting for a re-test will keep you out of many breakouts. It will also keep you out of many failed breakouts. Fewer trades taken; Higher number of winning trades. Larger pW/pL = lower risk = bigger position = bigger profits.

True. Personally, I prefer to wait for a pullback. However at times it does leave you staring at the screen, watching in amazement when all the energy get's released in such a strong way that price never looks back anymore.

 

[Jackie284]

thanks guys for all your input !

so in future, for someone who is new to it like myself, would I better waiting for the price to test resistance, and also watch the volume, before believing it may be a breakout ?

thanks
Jackie

 

[TheBramble]

would I better waiting for the price to test resistance, and also watch the volume, before believing it may be a breakout ?

If it's breaking out, it needs to be on higher volume than preceeding bars.

For extra caution, you could wait for a re-test of the breakout level to confirm new Support (for an upside break) or Resistance (for a downside break) on lower volume.

 

[Jackie284]

thanks Bramble,

Jackie

 

[dbphoenix]

I guess you can never know for sure, but aren't the odds against you when you trading a break of resistance in a situation where you know that price most likely will run out of steam?

For instance, I have three situations where I would think that trading the break is not a high probability thing to do:

a) the next resistance is very close if you look at a higher time frame
b) price might be bumping into resistance because of the daily range of that particular instrument: it's already been attained when the market finally breaks resistance
c) time is close to the EOD and there is little time left for the market to make much of an advance

I realize that these might be somewhat subjective (especially (b) as on some markets this seems to be much more flexible than on others), but why not "filter" some instead of "take it anyway"?

a. If you start mixing timeframes, there will always be resistance somewhere.

b. You never know when price might decide to extend its ADR for that day. DRs have doubled and tripled fairly frequently lately.

c. Price can move quite far fairly quickly.

Filtering is always an option, but as often as not it's used as an excuse not to take the trade because the trader has insufficient confidence in his approach. He therefore sits and watches price collapse or rocket without his participation.

As for waiting for retracements, I see little difference between being stopped out on a failed breakout and being stopped out on a retracement that turns into a reversal, except perhaps that buying the BO will enable the trader to at least reach breakeven, unless of course price recoils immediately after entry.

At bottom is the trader's ability to read what other traders are doing and trade accordingly.

Db

 

[black bear]

Keep it Simple, and have FUN

Hi everyone,

I have been spread betting lately and am still eally new to it, but I wondered what indicators you guys used to 'confirm' a breakout ?

many thanks

Jackie

Hi Jackie

There is no such thing as an indicator to 'confirm' a breakout. So, if you want to take my polite advice, stop wasting your valuable time looking for one. There are, however, certain 'things' that can help find breakouts that have a better probability of achieving what you might be looking for than others do.

This probably sounds like a very unhelpful thing to say. But I assure you it is not!

Cheers

Steve

Indicators are late, but I do like the look of a higher low on an indicator in combination with a lower low on the price chart, on a rising trend, and the reverse in a falling trend.

As far as a breakout is concerned, I take that off the price chart.

As db suggests, as far as looking for S/R is concerned, if you go grasshopping from one time scale to another you'll not trade much.

Split

If one is long & the price keeps on going up then its confirmed. .


Dont think. Trade. But theres knowing when you'll get paid to Fade? (not a Joe Ross slogan,so i'll bag it... )

Chop, chop, chop, creak crack, timberrrr.. at what point does one know the BIG tree is about to fall ?

Your amazing you are and I havn't even started chopping it yet.. trades4U

Waiting for a re-test will keep you out of many breakouts. It will also keep you out of many failed breakouts. Fewer trades taken; Higher number of winning trades. Larger pW/pL = lower risk = bigger position = bigger profits.

Hi Jackie.

All Great posts, Dbs that Splitlink followed very relevant IMO, I struggle with that one plenty I can tell you.

Db :arrowu: great late post posted together, how many times does that happen

Keep it simple, to much info leads to no action

and ~

P...s poor plan with excellent execution is more profitable than an excellent plan with p...s poor execution every day of the week.

Because you learn more, quicker and you identify potential problems instantly.

Write your new plan based on what you now think you no

Demo it without hesitation at every signal on a Demo account for a week or two.

Then come back and tell us how to trade Jackie or ask again

Good Luck

 

[TheBramble]

As for waiting for retracements, I see little difference between being stopped out on a failed breakout and being stopped out on a retracement that turns into a reversal,

The difference is if you're waiting for the retracement to stop at the level of the breakout (the re-test), you're not already in a trade and therefore you don't get stopped out. You're always at breakeven in that situation, and for no risk.

But as I said, it's not for everyone. I like fewer trades with a higher percentage of winners and I can live through missing the runaways. Others may well like to be ‘in the action’ and take more trades with fewer wins, but they make sure they get on board those outright breakouts that I’ll miss. Horses. Courses.

 

[black bear]

Hi Bramble and Db

The difference is if you're waiting for the retracement to stop at the level of the breakout (the re-test), you're not already in a trade and therefore you don't get stopped out. You're always at breakeven in that situation, and for no risk.

But as I said, it's not for everyone. I like fewer trades with a higher percentage of winners and I can live through missing the runaways. Others may well like to be ‘in the action’ and take more trades with fewer wins, but they make sure they get on board those outright breakouts that I’ll miss. Horses. Courses.

Hi Bramble and db,

Great thread you started Jackie excuse me for butting in

My Question and I think Fw skirted on it

Daft and million dollar one, but its Sunday so...... and important question IMO

Q: Wants in a trade at the break or pull back , or whatever trade set up for that matter, your in the money

How do you deal in your mind with S&R levels do you

1. Don"t bother with them from now on, just trail a Stop
2. Only look for ones in same time frame or ones greater
3 wait till target hit say 3:1 RR
4 Reversal pattern in higher or your own time frame

Daft question I now but its critical to adopt correct method with this one if your going to RUN PROFITS and end up a real winner and not a small stakes winner in the first and last race of the day

Andy AKA

 

[dbphoenix]

Hi Bramble and db,

Great thread you started Jackie excuse me for butting in

My Question and I think Fw skirted on it

Daft and million dollar one, but its Sunday so...... and important question IMO

Q: Wants in a trade at the break or pull back , or whatever trade set up for that matter, your in the money

How do you deal in your mind with S&R levels do you

1. Don"t bother with them from now on, just trail a Stop
2. Only look for ones in same time frame or ones greater
3 wait till target hit say 3:1 RR
4 Reversal pattern in higher or your own time frame

Daft question I now but its critical to adopt correct method with this one if your going to RUN PROFITS and end up a real winner and not a small stakes winner in the first and last race of the day

Andy AKA

Depends in part on how many contracts/shares you're trading. If you're trading multiples, you can redeem some at a target of some sort, let others run in one way or another. If trading the minimum, depends on how well you understand the relationship between price and volume and how each and both reflect what's on traders' minds.

Db

 

[black bear]

Thanks for answering the lazy question

Depends in part on how many contracts/shares you're trading. If you're trading multiples, you can redeem some at a target of some sort, let others run in one way or another. If trading the minimum, depends on how well you understand the relationship between price and volume and how each and both reflect what's on traders' minds.

Db

Thanks for that Db

Lazy me, checking links and Fw journal, think they should be good places to start

Sorry for Lazy approach, but its Sunday

Andy AKA