False breakouts
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Thread: False breakouts

  1. #1
    Anybody here trade false breakouts? I'm searching for someone to share ideas nd egies with or perhaps join a group. Allow me to know.

  2. #2
    Should you overlay your template together with signals from multiple time frames you'll normally find false breakouts and will make decisions how to react; if to take profit and reenter if the false breakout is completed, or ride it out. It is a sophistied trading technique though, so it might take a lot of work and time to grow if you are not knowledgeable about trading in this manner. While it will help define them as they happen, it doesn't mean that you won't get fooled from time to time. However, you should realize rather quickly it had been a head fake and also be able to close and enter back in the original direction. They are common occurrences, therefore it's a good question to ask.

  3. #3
    Really there#8217;s no such thing called #8220;false breakout#8221; as the breakout had happened, otherwise we wouldn#8217;t call it a breakout in the first place...

    Okay, here#8217;s my general egy on enjoying this #8220;false breakout#8221;:
    If a breakout happened, I am going to have breakout setup in the shape of #8220;BP #8212;gt; SL / TP#8221; in which SL = last supported valley/peak and TP can be calculated using the RRR methodology... (since I#8217;m working with the D1 candles, a 1R-TP is generally enough for me personally )
    As long as the predefined-TP hasn#8217;t been attained, I will wait for its 2nd/3rd-chance to perform this setup whilst watching its retracements... When the retracement of this setup can go back between 25%-33% of SL, I will consider this setup as a #8220;fail installation #8221; hence abandoning the 2nd/3rd-chance attempt... (If SL is attained on retracement, I will totally abandon the whole installation and await other opportunities)
    After deciding to not perform this setup to the predefined-TP, I will then try to play with a change with the SL as target... (in case the market goes to the predefined-TP after deciding to play change, I am going to have missed-trade but it costs me nothing monetarily)...

  4. #4
    I agree that a false break out is actually only false according to the time frame you're trading, which is why I suggest using more than one time period. If you lowered the time period to observe the break out, it would likely not be false.

    By calling it a false break out you're saying that it is an outlier to your normal average for that time period. This would typically indie the average you're using is likely a low price, therefore some outliers can influence its signal. By using a higher timeframe to compare the trading period frame against, you can use a higher average, so the outlier has less impact on the higher average. If you're using EMA, or LWMA, you further advance the impact of an outlier signal as current candles are far more heavily weighted in the average.

  5. #5
    Does not really matter what u call it. A failed break out on a m5 or h4 is neglected breakout so long as 2 variables exist 1) it is in direction of inherent trend and 2) it is of a technically considerable loion. Only thing which changes in greater timeframes is you investing in a larger leg. In my experience is more. The assessing a greater timeframe only distorts the perspective and contributes to confusion. Trading failed breakouts it is largely a discretionary syrategy, it serves better to limit the amount of information a trader must procedure when analysis price action. This is my personal opinion, it maybe different for other traders.

    For me it is about 2 things, retains it as simple as possible and and decrease plogical pressure as position move in my favor.

  6. #6
    1 Attachment(s ) ) Current position

  7. #7
    One type of false break out is call a hikakke. Do a web search for hikakke, making certain that you get the punctuation right. It is a very well documented manouevre that could signal fashion changes and help get into trends.

  8. #8
    In my opinion even when seeing 1 time period, there actually is no such thing as a false breakout! The 2nd effort or even 3rd for that thing in an area is not actually a hint, it is simply repeatedly bumping to a significant structural element further to the left on your charts!

  9. #9
    You've got to take into account 1) timing factor - How many pubs is current range two whether space has been analyzed before' avoid anything analyzed at least once and 3) determine if the trend is still intact. Would surely be bad idea to exchange a range that's 2 months old. I admit, the commerce played was not the greatest but trend was still intact.

  10. #10
    The other trade on usdzar h4 from conclusion of 5th waive.

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