The best way to trade breakouts
The best way to trade a breakout is to use the accumulation of the positions of the major players. What I mean? The accumulation position is usually tight consolidation on the chart when the range of candles is reduced.
Most often when you trade breakouts you will fail. However, using this technique, you will be able to increase the number of profitable trades.
For example, when dense consolidation occurs near the resistance level, it tells us that the pressure of buyers is high for a long period of time, and the sellers are not strong enough to deploy the price level.
When the price breaks the resistance level, traders with short positions to cut their losses. At the same time, the increasing pressure of traders-buyers, who will open the transaction breakdown. All these factors make the price to move up rapidly without significant setbacks.
The accumulation position is the main technique that I use when trading breakouts. However, it can have its variations.
For example, if we see higher lows in the area of resistance, most often it is a sign of strength buyers. This tells us that:
No pressure.
The pressure of buyers is strong enough since the price lows gradually increase.
A large number of stop orders to buy are grouped near the resistance level, which increases the likelihood of breakdown.
Here's how it looks:
you may be familiar with this graphical construction of the price chart. This ascending triangle.
So, if you find this price pattern, most likely it means that the market will make the breakout and continue its movement.
Consider an example for chertovoy position. Everything here is similar to what we learned earlier.
Whenever you see lower highs in the area of support level, it tells us that:
Pressure buyers absent.
Strong selling pressure pushes the price down.
At the support level placed stop orders to sell.
It is obvious that all signs of weakness.
