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    Tips For Profitable Breakout Trading

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    Runny Picasso
    While trading with the trend reduces risk, beginners should avoid counter-trend trading until skilled. Breakouts are more likely in range-bound markets with many limit orders above resistance and below support. A narrowing of price ranges usually precedes a breakout. Breakouts are confirmed by increased volume, and traders should avoid moves with falling volume. Trading when liquidity and volatility are high reduces costs while helping captures breakouts without false signals during low volatility. After an initial move, retests of broken support/resistance often occur, so traders should wait for retests before entering positions. Have an exit plan before trading to avoid emotional involvement.

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    Tips For Profitable Breakout Trading

    Uploaded by

    Runny Picasso
    35 views3 pages
    While trading with the trend reduces risk, beginners should avoid counter-trend trading until skilled. Breakouts are more likely in range-bound markets with many limit orders above resistance and below support. A narrowing of price ranges usually precedes a breakout. Breakouts are confirmed by increased volume, and traders should avoid moves with falling volume. Trading when liquidity and volatility are high reduces costs while helping captures breakouts without false signals during low volatility. After an initial move, retests of broken support/resistance often occur, so traders should wait for retests before entering positions. Have an exit plan before trading to avoid emotional involvement.

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    TIPS_FOR_PROFITABLE_BREAKOUT_TRADING

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    While trading with the trend reduces risk, beginners should avoid counter-trend trading until skilled. Breakouts are more likely in range-bound markets with many limit orders above resistance and below support. A narrowing of price ranges usually precedes a breakout. Breakouts are confirmed by increased volume, and traders should avoid moves with falling volume. Trading when liquidity and volatility are high reduces costs while helping captures breakouts without false signals during low volatility. After an initial move, retests of broken support/resistance often occur, so traders should wait for retests before entering positions. Have an exit plan before trading to avoid emotional involvement.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    35 views3 pages

    Tips For Profitable Breakout Trading

    Uploaded by

    Runny Picasso
    While trading with the trend reduces risk, beginners should avoid counter-trend trading until skilled. Breakouts are more likely in range-bound markets with many limit orders above resistance and below support. A narrowing of price ranges usually precedes a breakout. Breakouts are confirmed by increased volume, and traders should avoid moves with falling volume. Trading when liquidity and volatility are high reduces costs while helping captures breakouts without false signals during low volatility. After an initial move, retests of broken support/resistance often occur, so traders should wait for retests before entering positions. Have an exit plan before trading to avoid emotional involvement.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    While trading in the direction of the preceding trend

    can reduce risk and the chance of false breakouts,


    beginners should avoid counter-trend trading until
    they have adequate expertise.

    Due to an oversupply of limit orders above resistance


    and below support, assets in a prolonged range-
    bound market give the most spectacular breakout
    trading possibilities.

    A buildup, or the narrowing of each candlestick's


    highs and lows, generally precedes a breakout,
    making it one of the most important pre-breakout
    indicators for traders to watch.

    Breakout and breakdown trading are confirmed by


    volume, and traders should avoid price action moves
    when trading volume drops.

    Trading during periods of high liquidity lowers trading


    costs, while trading during periods of high volatility
    ensures traders capture a breakout with the ability to
    hold while avoiding false breakouts that frequently
    occur during periods of low volatility.

    Following the initial move, a breakout or breakdown


    normally reverses, retesting the broken support or
    resistance level, which now works as resistance or
    support, and traders should wait for the retest before
    entering their positions.

    Have an exit strategy in place before you enter the


    transaction, as this is the only moment you can
    approach it without being emotionally involved.

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