breakout vs reversal

Malordana

Member
69 3
It seems to me that a lot depends on the strategy, because as far as I know both approaches can be quite profitable and effective, but only if you have a good understanding of how it works, feel all the mechanisms and can use all the opportunities in practice.
And here I wouldn't give any specific recommendations, I would concentrate more on testing the approaches. So that you can see in practice what you feel best and what brings you the income that suits you. It seems to me that a lot more depends on your preferences and your needs in the market.
So try it, check the results and make a final decision.
 

tomorton

Legendary member
8,144 1,227
Breakouts are either continuations with the prevailing trend or from a range into a new trend. Reversals can only be against a prevailing trend. It follows that breakouts occur more frequently - on some scale, breakouts occur every 3 or 4 bars of a trend, whereas a reversal can only occur once.

The distance each can travel varies. All trends fail at some point so there is a limit to the number of breakouts with exceptional travel.

The reliability of each pattern is also different. Many reversals fail and set up a trap for the trader. In a consistent and well established trend, most continuation signals will succeed.
 
 
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