Trading Education Thread time 1/8

There are really only two types of trading styles:

1. Mean Reversion Trading
2. Breakout Trading

All other "styles" are merely indicator-based trading systems.

This thread will specifically discuss Breakout Trading

2/8

Breakout Trading requires identification of four elements in order to be successful:

1. Trendlines (pattern based support/resistance)
2. Price Action (overall trending direction)
3. Volume (the amount of participants)
3/8

Trendlines serve as support/resistance like order blocks (areas w/ prior bull/bear struggle) & lead to patterns. Human psychology does not like randomness which is why there tends to be strong reaction at the extremes of historical reference points or anticipated patterns.
4/8

The mkt tends to test two extreme ends of reference areas for a time, leading to a distinct larger pattern or range. A misconception is that certain patterns are always bearish/bullish, but the dominant trend (~4-7x TF above yours) influences the eventual breakout dir more.
5/8

Still, false breaks occur quite frequently. Basic patterns like triangles often trap newer traders that seasoned traders/algos regularly exploit, especially in crypto. Frontrunning or chasing mid-candle breakout is at high risk of being exit liquidity for the counter dump.
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Which brings us to the most critical part: volume. This is the amount of "interest" in this zone, & tends to decline during consolidation as both sides are bracing for impact w/uncertainty. A breakout needs a volume surge; it signals commitment by traders in that direction.
7/8

So how do you properly execute the trade? Identify the dominant trend, & reduce size when betting on the opposite breakout. If breakout, note if candle vol has spiked & closes outside. If so, enter position, & place stops just within the breakout line inside of the pattern.
8/8

Did you find this interesting? Don't forget to check out my thread on Mean Reversion psychology: https://t.co/pS2Dmdbg9c

Or join me at https://t.co/QcbdSfAti4 to share alpha and network with others (no it's not a paid group)

More from Tradingthread

I’m using Twitter as my trading journal. Feel free to follow along and learn with me. I’ll post the resources I’ve found most valuable below. I’ve attached my evolving trading rules. As you can see, I am continually learning from my mistakes and feel more prepared each day.


Wave theory resources:

https://t.co/zMLJx0Posg

Recommend checking out @StockDweebs newsletter. I don’t practice wave theory myself but have found his picks highly accurate and like to correlate them with my own.

YouTube channels:

TrendSpider @TrendSpider
smithsintheblack @RobInTheBlack
Sara Sabatino @ssabatino84
_ms_izzy @_ms_izzy
Learn to Day Trade @TrueBubbleHead
StockDweebs @StockDweebs
watchjoshtrade @watchjoshtrade
BullTradeFinder @BullTradeFinder
MagicMike @magicmiketrader
So I'll give you a breakdown on which website I use to check my DD along with mainly using my PLATFORM as the MAIN source of information. But other websites are also used. . Then I will provide you with a youtuber whose name is RILEY ..

his content from the playlist start with "how to read stock charts". It's precise and on point and short enough for you to get through this week even if you did one video tonight .. I like his teaching method .. he's slow and very easy to understand

As for DD. It comes from many factors. Mainly the trading platform itself has updated news posted on the ticker you want to trade.
https://t.co/1f8wQs1LcA

Really liking this website it has breakdown of the financials & summary of SEC filings. (con'd)

Also a whole bunch of other stuff that it focuses on the companies that you search. As for what I look for?

10-K & 10-Q.
Read 8Ks ..company updates
Also look to see if they did an recent Offerings (S-4 filings)
Also look to see S-3 filings for upcoming dilutions.

cont'd

https://t.co/nxP0hAJ4UH (Great place for quick articles on many stocks that are posted by analysts who do very good work digging info)

https://t.co/KsYqlmTlQ8 for quick news info
https://t.co/v5xGZqWhbn For constant world news

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I hate when I learn something new (to me) & stunning about the Jeff Epstein network (h/t MoodyKnowsNada.)

Where to begin?

So our new Secretary of State Anthony Blinken's stepfather, Samuel Pisar, was "longtime lawyer and confidant of...Robert Maxwell," Ghislaine Maxwell's Dad.


"Pisar was one of the last people to speak to Maxwell, by phone, probably an hour before the chairman of Mirror Group Newspapers fell off his luxury yacht the Lady Ghislaine on 5 November, 1991."
https://t.co/DAEgchNyTP


OK, so that's just a coincidence. Moving on, Anthony Blinken "attended the prestigious Dalton School in New York City"...wait, what? https://t.co/DnE6AvHmJg

Dalton School...Dalton School...rings a

Oh that's right.

The dad of the U.S. Attorney General under both George W. Bush & Donald Trump, William Barr, was headmaster of the Dalton School.

Donald Barr was also quite a


I'm not going to even mention that Blinken's stepdad Sam Pisar's name was in Epstein's "black book."

Lots of names in that book. I mean, for example, Cuomo, Trump, Clinton, Prince Andrew, Bill Cosby, Woody Allen - all in that book, and their reputations are spotless.
The YouTube algorithm that I helped build in 2011 still recommends the flat earth theory by the *hundreds of millions*. This investigation by @RawStory shows some of the real-life consequences of this badly designed AI.


This spring at SxSW, @SusanWojcicki promised "Wikipedia snippets" on debated videos. But they didn't put them on flat earth videos, and instead @YouTube is promoting merchandising such as "NASA lies - Never Trust a Snake". 2/


A few example of flat earth videos that were promoted by YouTube #today:
https://t.co/TumQiX2tlj 3/

https://t.co/uAORIJ5BYX 4/

https://t.co/yOGZ0pLfHG 5/