Watch Post-Breakout Behaviour – 1

 

This is what I like to see in a breakout…

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

This is a prime target for a breakout failure.

But I don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, I watch post-breakout behaviour and CONFIRM that there are no signs of strength.

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour> 

<image: Watch Post-Breakout Behaviour>

<image: Watch Post-Breakout Behaviour>

Don't ever just jump in and fade the break.

There is never any certainty in this game. It may well rally.

Instead, watch post-breakout behaviour and CONFIRM that there are no signs of strength.

Happy trading,

Lance Beggs

 


 

Written by

YourTradingCoach - Admin

5 Comments to “Watch Post-Breakout Behaviour – 1”

  1. loco_locatis says:

    I love these kind of trades and examples. This is the way to learn how to beat the price.
    For me, the more difficult moment of the trade is to believe the trigger I’m seeing is really a trigger or a trap. Don’t you use any indicator to confirm it?
    In this case, why didn’t you use a limit sell order in the five small candle before it went down?
    And, I suppose in a resitance the principle of being with the trend is not worth
    Reggards

    • Lance Beggs says:

      Q. For me, the more difficult moment of the trade is to believe the trigger I’m seeing is really a trigger or a trap
      A. Your job is not to win on any particular trade. But to identify edge and take it, winning across a larger sample of trades. Extend your time perspective out beyond this one trade, to the full series, and the real fear is then in not taking the trade.

      Q. Don’t you use any indicator to confirm it?
      A. No

      Q. why didn’t you use a limit sell order in the five small candle before it went down?
      A. Entry is only at the time I feel the breakout traders know they’ve got it wrong. I’d love to have been able to enter earlier, but I wasn’t feeling it then, until the break down from that small stall region.

      Q. I suppose in a resitance the principle of being with the trend is not worth
      A. Depends upon context. In the right situation, with-trend trades are the right option. In the wrong context, they’ll lose. In this case (a largely non-directional market overextended through the high of day) – that is generally NOT the place to be looking to trade with-trend. If the breakout holds though, then this is a different story.

      • loco_locatis says:

        Thanks, master. All answered. As you said, there is a great part of feeling and addition of trades.
        Thanks again.

  2. Jay says:

    Lance,
    That thank you note from loco_locatis brought to mind a scene from Kung Fu Panda. I often feel like Po to your Shifu 🙂 Thanks Master.

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