simple setups

[jacknapier]

In one of her books Toni Turner says there are only 4 setups: breakout from consolidation, breakout from upside pullback, breakdown on consolidation and breakdown on downside pullback. I'm wondering how true any of you find this to be. Or is there a better way of explaining it?

Or is there a website that breaks down some simple setups, that show them both succeeding *and* failing? Turners book only shows them succeeding, instead of also including how and why they fail sometimes.

 

[wackypete2]

In one of her books Toni Turner says there are only 4 setups: breakout from consolidation, breakout from upside pullback, breakdown on consolidation and breakdown on downside pullback. I'm wondering how true any of you find this to be. Or is there a better way of explaining it?

Or is there a website that breaks down some simple setups, that show them both succeeding *and* failing? Turners book only shows them succeeding, instead of also including how and why they fail sometimes.

Sounds like only 1/2 of a book. Anyone can "prove" any set-up works by showing you only successful iterations. If you don't know or understand how and why they fail then how would you know what is the best way to trade them?

There's nothing wrong with trading breakouts but you need to understand the whole pie not just a slice of it.

Peter

 

[forker]

Know why a setup failed... You'd need to take the blue pill to know that.

 

[Enzzo]

Playing breakouts can be quite dangerous trading practice... as most of the "big fishes" out there, do love triggering stop orders to get their liquidity and to trap/squeeze people....
That's why I also agree with the 2 previous posts, regarding you need to know all the parts of the breakout technique, where it is good and not so good, and how is the better way to play the breakout idea as there are some different options...

 

[Dominator4fx]

Playing breakouts can be quite dangerous trading practice... as most of the "big fishes" out there, do love triggering stop orders to get their liquidity and to trap/squeeze people....
That's why I also agree with the 2 previous posts, regarding you need to know all the parts of the breakout technique, where it is good and not so good, and how is the better way to play the breakout idea as there are some different options...

Most of the breakouts are actually triggered by the news that comes into the markets and this is what we have to watch for.

 

[neil]

Most of the breakouts are actually triggered by the news that comes into the markets and this is what we have to watch for.

Stop spamming so many threads

 

[VielGeld]

Know why a setup failed... You'd need to take the blue pill to know that.

Lol, yeah. "Setups" are terms to keep the retails subdued and passive.

Learning about the market has been like going down the proverbial Rabbit Hole, though. You'll never see the market or the economy in quite the same fashion you used to. It feels like the Matrix, and you can never go back.

Anyway, setups. There aren't any, per se. You have to look beyond the "setups" that technical analysis would have you believe are there and rather see market participant behaviour in a given timeframe. Once you realize these behaviours, you'll see the market in a whole different light.

 

[tomorton]

See Encyclopedia of Chart Patterns, Thomas N. Bulkowski, for hard-headed analysis and statistics of common chart patterns, how to trade them and how and why they fail.

That said, I suppose in a sense Turner is not wrong, though more knowledge is required in order to trade patterns than such a reductive view. e.g. I suppose all price movement is either continuation of trend or reaction against trend, but that's not enough knowledge to make a profit.

 

[Enzzo]

Most of the breakouts are actually triggered by the news that comes into the markets and this is what we have to watch for.

Sorry but I have to disagree with you here...
Yes, news make many momentum moves, but as I see it is:
How many times are you triggered by "spikes" even on news, just to go the other way around before one of those trigger you and keep on going in the "right direction"?