Today we had three different breakout pullbacks with three different outcomes. The following charts show the trading timeframe first (one chart), followed by the lower timeframe detail (three charts, one per trade).

breakout pullback trades

breakout pullback trades

breakout pullback trades

breakout pullback trades

A common question (although often appearing in different forms) is "but how do I know whether they will work or not?"

Answer… I don't know.

But the trades set up in a strongly directional market, in a high probability structural position, and allow for tight risk control and potential profits several times the risk if the prior lows break.

You've got to take these!

Let's look at trade 3 again from a slightly different lower timeframe perspective (tick chart instead of range chart, for those not familiar with my use of the range charts and scalper channel):

breakout pullback trades

If I'm immediately wrong on the trade then the loss is within acceptable limits.

If I'm partially right and price acts to test the prior low but then fails to follow through, then I'll have taken partial profits (approx 1R) and have scratched the remainder (well I would have if achieving a full fill; with partial fill I would have just scratched).

But if I'm right (and don't stuff up the management) then I get a really nice outcome (even with a partial fill).

The market structure and price action combined to offer opportunity that is good from both a win% and win:loss size ratio perspective. You've got to take them every time. You can't know if they'll work or not. Just take them… and manage the outcome.

Happy Trading,

Lance Beggs

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