How To Navigate: Breakouts with Tools, Indicators & Strategy

23 Jan

Having a Clear and Precise understanding of whether you're dealing with a Breakout or False Breakout can help you:
1) Find potentially profitable opportunities
&
2) Avoid making risky investment moves!

Also knowing how to Confirm Trend Change can:
1) Rise probability of profitable trades
&
2) Limit the total # taken!

So today, I lay out the tools, indicators and tips I use to visualize and to make a decision!

Examples:
XLMUSD & XRPUSD

Tools:
- Trendline
- Parallel Channel
- Rectangle

Indicators:
- Volume
- RSI
- "True or False" Formula : Close + 20-25% Break + 5-6 Days Outside of Break = Breakout

23 Jan

Nota

23 Jan

Nota

23 Jan

Nota

Tips:
- 45 Degree Trendlines are typically most reliable
- 2 Touches signals Potential Trendline, 3rd Touch Validates
- Extend only the Support and Resistance Trendlines that succeed in Supporting or Resisting and discard the unsuccessful ones
- To Maximize Gains and Limit Risks, stay unbiased and utilize Data, Not Emotion
- Statistics show that Triangles fail to deliver the expected result 1/3 of the time. If expected result is delivered, failure rate drops to 2%.

8 Feb

Nota

The X amount beyond the break and Y amount of days closed outside of the True or False formula is dependant upon the market and asset you are trading, it's not one size fits all!

Backtest the assets you trade and see what percentages yield the successful breaks!