One of the absolute best ways I like to see price set up for a TST/BOF trade at support or resistance is when price has to move a LOOOONG way to get there.
It can snap back nicely should the breakout fail.
Think of a rubber band, stretched tight. And then released!
We looked at a closely related concept before, where price accelerates into the level.
- When Price Stretches to Reach the Level – 1
- When Price Stretches to Reach the Level – 2
- When Price Stretches to Reach the Level – 3
Today is a little different in how price moves into the level, although the outcome is the same.
In this example, it gets there through one very long price swing.
Prior to the session open.
30 minute Higher Timeframe chart.
And now to our 1 minute Trading Timeframe chart.
See here for full details on the setups, entry trigger patterns and both the LWP and Sixth Principle concepts.
And keep an eye out for this scenario in your markets.
When price has to stretch a LONG way to reach a level, it can create a really nice bounce back.
For me, this is a must-trade scenario.