We've previously discussed the idea of fading breaks which occur against the market bias.
Often they're a trap!
If we can anticipate that trap then we can position ourselves for a successful trade by entering at or before the point of their failure.
See here if you missed the prior articles on this concept:
This concept can play out in many forms and on different timeframes. For example:
- TTF CPB or BOF setups
- LTF 3SR or Spring/Upthrust triggers
Let's look at two slightly different examples from Wednesday's Crude Oil session (to take advantage of the crazy volatility that CL has offered in the last few days!).
Don't let the low timeframes freak you out. The concept applies no matter what timeframe or market you trade – failed breaks against bias can provide you with great trade opportunity.
(1) Trading timeframe CPB trade.
(2) Trading Timeframe PB trade.
All markets… all timeframes.
When a breakout occurs against a larger market bias, anticipate a failure.
Trending markets… find breaks of swing highs/lows against the trend.
Ranging markets… find breaks around the edges of range support and resistance.