Excellent material on trading the break-out. However, isn't this diametric to your philosophy on S&R trading? I see S&R as being mutually exclusive to a break-out approach. The closest I can reconcile the two strategies as being complementary is to use the S&R for identifying a pull-back opportunity for entering your position. The fundamental problem is that it's often difficult to ascertain between a temporary pull-back and a trend reversal, especially if your sl is 50 - 75 pips.
Your guidance on this matter would be most appreciated, as with all your other responses and insightful commentary.
Hi Walt, nothing too counterintuitive here, support and resistance is support and resistance, and they can be played either by fading or on breakouts. I know that most of the trades I post here are fades, but alot of my profits come from breakouts as they're such easy trades sometimes.
In terms of distinguishing the two, Im just playing breakouts based on violations of these areas, fading comes upon overextension or with continuation of price trends. I would recommend perhaps digging through examples posted in the exaplmes section and seeing similar price patterns that we look at in order to see clear differences between the two.
Thanks for the feedback, Steve. I'll certainly try to study the charts in the examples section. However, upon cursory review of the charts in that section, it seems VERY difficult to "predict" a fade or break-out at a support/resistance level. I think that I understand your point about multiple (3 or more) bounces off a support or resistance level being a good indication of a pending break-out. The big challenge is that there are so many break-out that occur during the 1st or 2nd encounter with a s&r level.
I wish there was a more reliable way of determining fade or break-out at a s&r level.
BTW, along the lines of a break-out strategy, is there any merit to continuing with the direction (trend) of a price movement and get-out or trail stop at the s&r levels?
I have a basic question: After blowing my first account using indicators, I'm trying to know how to enter trades using PA. With indicators I waited until a few seconds until the candle time finished. However, with PA (let's say a strong resistance level) I don't know if you enter right in the line, after it's obvious it will bounce or continue (with the risk of it going back) or after the first small bounce. This is really important because I don't know (because of lack of experience) which is better. I know if "depends" and "every time may be different", I'd just want an experienced trader's point of view. Thank you very much.
Hi Rafael, I think you said it right there; alot of this will come through general experience. Many times I will look for an immediate bounce on a very low timeframe, and get in based on what I see. If areas become clearly violated, they can be just as good for expanding breakouts. Smaller timeframe will work the best many times for these cases. Just wait for the good ones, and dont try to force any trades, is usually the best advice I can provide.
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Hi Steve,
Excellent material on trading the break-out. However, isn't this diametric to your philosophy on S&R trading? I see S&R as being mutually exclusive to a break-out approach. The closest I can reconcile the two strategies as being complementary is to use the S&R for identifying a pull-back opportunity for entering your position. The fundamental problem is that it's often difficult to ascertain between a temporary pull-back and a trend reversal, especially if your sl is 50 - 75 pips.
Your guidance on this matter would be most appreciated, as with all your other responses and insightful commentary.
thanks,
Walt
Great coaching. Thanks
Hi Walt, nothing too counterintuitive here, support and resistance is support and resistance, and they can be played either by fading or on breakouts. I know that most of the trades I post here are fades, but alot of my profits come from breakouts as they're such easy trades sometimes.
In terms of distinguishing the two, Im just playing breakouts based on violations of these areas, fading comes upon overextension or with continuation of price trends. I would recommend perhaps digging through examples posted in the exaplmes section and seeing similar price patterns that we look at in order to see clear differences between the two.
Thanks for the feedback, Steve. I'll certainly try to study the charts in the examples section. However, upon cursory review of the charts in that section, it seems VERY difficult to "predict" a fade or break-out at a support/resistance level. I think that I understand your point about multiple (3 or more) bounces off a support or resistance level being a good indication of a pending break-out. The big challenge is that there are so many break-out that occur during the 1st or 2nd encounter with a s&r level.
I wish there was a more reliable way of determining fade or break-out at a s&r level.
BTW, along the lines of a break-out strategy, is there any merit to continuing with the direction (trend) of a price movement and get-out or trail stop at the s&r levels?
Thanks,
Walt
Great video, thank you very much!
I have a basic question: After blowing my first account using indicators, I'm trying to know how to enter trades using PA.
With indicators I waited until a few seconds until the candle time finished.
However, with PA (let's say a strong resistance level) I don't know if you enter right in the line, after it's obvious it will bounce or continue (with the risk of it going back) or after the first small bounce.
This is really important because I don't know (because of lack of experience) which is better.
I know if "depends" and "every time may be different", I'd just want an experienced trader's point of view.
Thank you very much.
Hi Rafael,
I think you said it right there; alot of this will come through general experience. Many times I will look for an immediate bounce on a very low timeframe, and get in based on what I see. If areas become clearly violated, they can be just as good for expanding breakouts. Smaller timeframe will work the best many times for these cases. Just wait for the good ones, and dont try to force any trades, is usually the best advice I can provide.
Post a Comment