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)
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
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)
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 Human psychology does not like randomness which is why there tends to be strong reaction at the extremes of historical reference points or anticipated patterns.
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.
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.
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.
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.
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)
1/5 Another market psychology tidbit:
— Sell When Over | 9000.eth (@sell9000) June 1, 2021
REVERSION TO THE MEAN
Why are moving averages so important? Remember that they are comprised of the recent mean of a period of prices, so they tend to slope up or down depending on the trend.
More from Tradingthread
It's time for a mega-thread (Updated).
This contains some of the best threads and articles on various topics related to trading, that I have posted till now.
Enjoy!😊
A thread on closing basis Stop
A thread on
Position
Trading
This contains some of the best threads and articles on various topics related to trading, that I have posted till now.
Enjoy!😊
A thread on closing basis Stop
I have been asked many times about my views on Closing basis Stop loss.
— Trader knight (@Traderknight007) November 5, 2021
So here's a thread on the same. pic.twitter.com/qFgujKAFqS
A thread on
Experience don't count in trading IMO, i can show you people who are trading from last 20 years and still losing money and i can also show you people who are in market since 3-4 years and are Profitable.
— Trader knight (@Traderknight007) June 25, 2021
What matters is how much time do you take to learn from a mistake,
Position
90% of the difference between the performance of a super trader and a normal joe is due to the position sizing.
— Trader knight (@Traderknight007) July 3, 2021
In this article, we will learn why position sizing is important and how we can implement it by learning 3 effective position sizing techniques.https://t.co/gWS4Ifi4OJ
Trading
The biggest trading mistakes that cost me lakhs of Rupees.
— Trader knight (@Traderknight007) July 17, 2021
And the lessons that I learned from them. \U0001f447https://t.co/NCwMM8SVYz
You May Also Like
IMPORTANCE, ADVANTAGES AND CHARACTERISTICS OF BHAGWAT PURAN
It was Ved Vyas who edited the eighteen thousand shlokas of Bhagwat. This book destroys all your sins. It has twelve parts which are like kalpvraksh.
In the first skandh, the importance of Vedvyas
and characters of Pandavas are described by the dialogues between Suutji and Shaunakji. Then there is the story of Parikshit.
Next there is a Brahm Narad dialogue describing the avtaar of Bhagwan. Then the characteristics of Puraan are mentioned.
It also discusses the evolution of universe.( https://t.co/2aK1AZSC79 )
Next is the portrayal of Vidur and his dialogue with Maitreyji. Then there is a mention of Creation of universe by Brahma and the preachings of Sankhya by Kapil Muni.
In the next section we find the portrayal of Sati, Dhruv, Pruthu, and the story of ancient King, Bahirshi.
In the next section we find the character of King Priyavrat and his sons, different types of loks in this universe, and description of Narak. ( https://t.co/gmDTkLktKS )
In the sixth part we find the portrayal of Ajaamil ( https://t.co/LdVSSNspa2 ), Daksh and the birth of Marudgans( https://t.co/tecNidVckj )
In the seventh section we find the story of Prahlad and the description of Varnashram dharma. This section is based on karma vaasna.
It was Ved Vyas who edited the eighteen thousand shlokas of Bhagwat. This book destroys all your sins. It has twelve parts which are like kalpvraksh.
In the first skandh, the importance of Vedvyas
and characters of Pandavas are described by the dialogues between Suutji and Shaunakji. Then there is the story of Parikshit.
Next there is a Brahm Narad dialogue describing the avtaar of Bhagwan. Then the characteristics of Puraan are mentioned.
It also discusses the evolution of universe.( https://t.co/2aK1AZSC79 )
Next is the portrayal of Vidur and his dialogue with Maitreyji. Then there is a mention of Creation of universe by Brahma and the preachings of Sankhya by Kapil Muni.
HOW LIFE EVOLVED IN THIS UNIVERSE AS PER OUR SCRIPTURES.
— Anshul Pandey (@Anshulspiritual) August 29, 2020
Well maximum of Living being are the Vansaj of Rishi Kashyap. I have tried to give stories from different-different Puran. So lets start.... pic.twitter.com/MrrTS4xORk
In the next section we find the portrayal of Sati, Dhruv, Pruthu, and the story of ancient King, Bahirshi.
In the next section we find the character of King Priyavrat and his sons, different types of loks in this universe, and description of Narak. ( https://t.co/gmDTkLktKS )
Thread on NARK(HELL) / \u0928\u0930\u094d\u0915
— Anshul Pandey (@Anshulspiritual) August 11, 2020
Well today i will take you to a journey where nobody wants to go i.e Nark. Hence beware of doing Adharma/Evil things. There are various mentions in Puranas about Nark, But my Thread is only as per Bhagwat puran(SS attached in below Thread)
1/8 pic.twitter.com/raHYWtB53Q
In the sixth part we find the portrayal of Ajaamil ( https://t.co/LdVSSNspa2 ), Daksh and the birth of Marudgans( https://t.co/tecNidVckj )
In the seventh section we find the story of Prahlad and the description of Varnashram dharma. This section is based on karma vaasna.
#THREAD
— Anshul Pandey (@Anshulspiritual) August 12, 2020
WHY PARENTS CHOOSE RELIGIOUS OR PARAMATMA'S NAMES FOR THEIR CHILDREN AND WHICH ARE THE EASIEST WAY TO WASH AWAY YOUR SINS.
Yesterday I had described the types of Naraka's and the Sin or Adharma for a person to be there.
1/8 pic.twitter.com/XjPB2hfnUC
Great article from @AsheSchow. I lived thru the 'Satanic Panic' of the 1980's/early 1990's asking myself "Has eveyrbody lost their GODDAMN MINDS?!"
The 3 big things that made the 1980's/early 1990's surreal for me.
1) Satanic Panic - satanism in the day cares ahhhh!
2) "Repressed memory" syndrome
3) Facilitated Communication [FC]
All 3 led to massive abuse.
"Therapists" -and I use the term to describe these quacks loosely - would hypnotize people & convince they they were 'reliving' past memories of Mom & Dad killing babies in Satanic rituals in the basement while they were growing up.
Other 'therapists' would badger kids until they invented stories about watching alligators eat babies dropped into a lake from a hot air balloon. Kids would deny anything happened for hours until the therapist 'broke through' and 'found' the 'truth'.
FC was a movement that started with the claim severely handicapped individuals were able to 'type' legible sentences & communicate if a 'helper' guided their hands over a keyboard.
For three years I have wanted to write an article on moral panics. I have collected anecdotes and similarities between today\u2019s moral panic and those of the past - particularly the Satanic Panic of the 80s.
— Ashe Schow (@AsheSchow) September 29, 2018
This is my finished product: https://t.co/otcM1uuUDk
The 3 big things that made the 1980's/early 1990's surreal for me.
1) Satanic Panic - satanism in the day cares ahhhh!
2) "Repressed memory" syndrome
3) Facilitated Communication [FC]
All 3 led to massive abuse.
"Therapists" -and I use the term to describe these quacks loosely - would hypnotize people & convince they they were 'reliving' past memories of Mom & Dad killing babies in Satanic rituals in the basement while they were growing up.
Other 'therapists' would badger kids until they invented stories about watching alligators eat babies dropped into a lake from a hot air balloon. Kids would deny anything happened for hours until the therapist 'broke through' and 'found' the 'truth'.
FC was a movement that started with the claim severely handicapped individuals were able to 'type' legible sentences & communicate if a 'helper' guided their hands over a keyboard.
