In today's video David Jones will be talking about one of the worst trading scenarios and that is the False Breakout.
Textbooks say that if a trend line breaks, then that's it - another direction is certain. Well, that's not exactly true. Patience is key.
Making the decisions in the right time at the right price makes all the difference. This video will help you make that judgment with more knowledge about the different possible scenarios.
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Trading 212 is one the best channels for learning to trade in the stock market. The honesty and sincerity of the presenters are like a fresh breath of air compared to so many channels who just boast of their achievements and make it look easy or make it look so hard that you are forced to buy something they are selling. Keep up the good work and hoping for an interactive webinar soon. :)
my concern is that , you didn`t explain all terms exp. min 9.58 , when Dojii candel happen that small candle that take a break mean , that price doesn`t have force to break and for professional trader its good reason to prepare foll sell also tell us that people that was in buying position take they`re profit and go out of position. And also when price break key levels ex. supp usually 80-90% if we done have any fundamentals , it comes to re-test that level again and if we doesn`t see long candel in timeframe 4h or 1h means that price will drop, and will not come back until meets weekly supp or res from previous month. If would like to say also that in forex its everytime IF IF IF , nothing is 100% , big banks are behind this faking price and you need to make sure you are in the same way with them once You do that keep pushing and taking pips as much as your mouth can eat :) haha BE PRO OR DIE DOING SHIT THINGS , for this guy how is explaining i will give 1-10 , 6 only cause he is trying
This is all well and good but the key to these situations is position sizing and startegy implementation. These are great spots to use spreads so you dont get chopped to pieces trying to use a stop. Either use a verticle spread in the direction you choose and you put time on your side so you have exposure with defined risk. Or slap on a straddle and simply take off the profitable side when whichever move happens is exhusted and let the other side ride for future consolidation or you can turn the losing side into a credit spread while you wait. Using stops in these situations is suicide.
Hey there, first time viewer here. I really appreciate the content and advice. One thing you haven't mentioned, and maybe that's because you're looking at hour candles and days or weekly candles, but volume. You haven't mentioned anything about the volume with trades during these breakouts or false breakouts. I wanted to hear your opinion on volume with breakout predictions and why you didn't bother mentioning this. Happy green days!
I didnt learn a thing, all you did was show examples of false breakouts but you didnt explain exactly what to look for to be able to predict them except for “look at the price action”
I was expecting you’d go more into depth about wick lengths etc. and how to actually spot false breakouts using candlesticks.
Would you consider this to be a major support line that has been tested and broken through? It seems if we master support and resistance this will help us gain more insights to what to expect during the possible breakout and bounce back.
I'm having trouble getting the right timeframe. The same course, at the same time, reveals different trading actions in different timeframes. In addition, I often lose track when switching between different timeframes. Especially if the screen is automatically rescaled each time. Please explain how you deal with it. I would be very grateful.
Great videos. Do you spend any time looking at fundamentals? In the Apple example you mention that the gap down could be caused by market reaction to results but I wonder if you use knowledge of fundamentals to inform buy/sell side opportunities?
Hi Peter, the trading app is Trading 212. Trade for free with virtual money at www.trading212.com/en/Open-Practice-Account-GBP. Web app and free native mobile apps for iOS and Android remain at your disposal.
Hi Tamim, you may want to take a look at these videos elaborating on the Volume Indicators:
Volume Indicator Trading Part 1 - https://youtu.be/wfySsU4JO3g
Volume Indicator Trading Part 2 - https://youtu.be/depNunVItWE
Excellent video. Very well put together. I have one thing to add though.
According to the false breakout example with the USD/JPY, the false breakout can also be recognize by the smaller and smaller size of the green candles. This indicates that the buyer momentum is dropping. Wysetrade made a brilliant video on this exact pattern explaining it in greater detail.
Otherwise still a great video!
Great videos but sorry, i didnt found much of false break out thr. Some straight lines would do the magic. Maybe i dont have much of the pro candle stick knowledge or i read them differently. Again thank you for the video. BIG FAN N FOLLOWER.
But isn't that cuz you are simply just drawing perfectly horizontal supports and resistances, and the fact that you aren't using other indicators such as EMAs and Stoch RSIs/RSIs and volume to recognize a breakout?
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At around the 8 minute mark play close attention to the inside price bar on gold that retests the 1235 area. That's what ignited the reversal to the upside. Inside and outside price bars as well as engulfing patterns showing up when testing major levels creates an approximate 80% probability trade. The patience required to watch an asset until this pattern shows up is what kills traders accounts.
Summary: The answer to "How to recognize false breakouts" is "You wait a bit". The title should really be, "How to profit from false breakouts". Much better clickbait wording and the answer is actually in the video. The answer: "If the support gets broken, you wait a bit to verify. When it comes back to the resistance (previous support), you enter a position with a stop-loss just below the resistance." There you go. Saved you a bit of time. Now learn something much more useful like RSI.
I say, Bull Shit - no hate intended.
Still, only history, thus the future in the past was known.
Like the Apple example - not knowing the future, there was exactly the same situation at resistance when price first started pulling back down, and then ruined many people's account with a great gap up.
This is, still not the right approach to trading.
Hi, it's a habit (maybe a bad one) that I have never got into because in the early days there was no real volume available for forex. But as you say, it's another way you could try and confirm the validity of the breakout.
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