Thoughts on Confirming Breakouts in Current XAUUSD Conditions?

[yassir_lamrichi]

Hi everyone,

Yassir L. here. Been closely observing XAUUSD price action, especially on timeframes like the M15. With gold's recent volatility, I'm curious about the community's current approaches to confirming the validity of breakouts before committing to an entry.

What are your preferred indicators or confluences for filtering out potential fakeouts, particularly when trading breakout strategies? Are there any specific market structure nuances you're paying more attention to in these conditions?

Always keen to learn from the varied experiences here.

Best,
Yassir L.

 

[tomorton]

I don't trade M15 and am not in Gold right now but it's a worthwhile TA question for all markets on all time-frames. Or should I say puzzle? Becasue I don't think that there's an ideal solution.

Many traders use various parameters which they want to see before taking a break-out trade, such as indicator levels, volume etc.. But consideration of these is only triggered when price moves to a certain level first. So why not just use price on its own? The logic being that the further price moves at the start of a break-out, the less likely it is to be just background volatility........

 

[RolloTape2025]

What do you consider a new breakout Yassir? Some people mean just a new recent high being made, e.g. Thursday 10th April. Some people consider a sort of consolidation period beforehand and then it makes that new high, e.g. Thursday 13th March? Looking at the Gold chart it has been falling from the high for the past few weeks. Are you considering taking a trade at the April 22nd high?

Why don't you try to define what you mean by breakout? Then define what you mean by a 'valid' one. Then once you have those, if you take the trade at the breakout and it isn't behaving like a valid one, you know to exit, and if it is behaving like a valid one, you know to hold onto the trade. That requires doing some research and testing on breakouts and what happens after.

A good entry is important, but so is managing an existing trade. What happens after the breakout will confirm if it is 'valid'. I think you are looking for some methods that will allow you to enter at a new breakout high and have confidence in it. There are things that can improve your chances, but nothing is ever 100% in this game.

Alternatively, consider getting in before the breakout happens. But that also requires research and testing

 

[1nvest]

Alternatively, consider getting in before the breakout happens.

totally agree with this approach. there is a study done by Meb Faber which says any indicator is generally more successful within 5% of its highs. this was done on longer time frames. i use the approach myself rather than waiting for the breakout itself

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