Home Trading Strategies 5 KEY Tips for Trading Breakouts (Like a PRO)

5 KEY Tips for Trading Breakouts (Like a PRO)

5 KEY Tips for Trading Breakouts (Like a PRO)

hey hey what’s up my friend so in this video I’m going to share with you five powerful trading tips on how to trade breakouts so keep watching ok so the first technique that I want to share with you is what I call trading breakouts we’ve built up right so let me explain so what is a build up a bill up basically means write a tight consolidation so it looks something like this alright you’ll see that over here this chat this rectangular box is what I call a bill up and the reason why I’m looking for a bill up is very simple right whenever you see a bill up especially forms it when you form it resistance or support right it tells you one thing right for example in this case it is format resistance and there’s a build up format resistance what it’s telling you is that buyers are willing to buy at this higher prices right thing about this resistance is an area where you know traders are looking to shut the market right where you expect the price to come down the fact that the price cannot come down and is hovering at this higher prices for quite a while thanks about like what 2025 candles right it’s telling you that the buyers are just willing to buy at this higher prices and this is a sign of strength right traders are buying at such higher prices because they think that the price is about to break out higher right so this is a sign of strength and whenever you see a build up from it resistance right it’s a sign of strength and the market could possibly break up from here all right so this is number one right well how you can treat breakouts right look for breakouts with built up number two higher loose into resistance this is also another sign of strength right because it tells you what does it tell you it’s telling you that buyers right are willing to buy at this higher prices right it’s a faiello higher low higher low and this higher low over here it’s telling it over time buyers are willing to buy and this prices even though the prices are hitting higher so this again is a sign of strength right and you can look to buy the break-up of this pattern is otherwise known as a ascending triangle chat pattern all right and the opposite of this is what we call the descending triangle it’s simply lower highs into support where you notice that the price is actually making lower highs in to support telling you that sellers are willing to sell at this lower prices so they’re just you know the inverse okay the fourth technique I want to share with you is what I call the retest right so when the price breaks out right there are times where it comes back and retest the level previous resistance turn support so here’s an example right price break out of this high retest the previous resistance now again support price breaks out of it again retest previous resistance now again support price then breaks out of this swing high retest previous the swing high did I can support price breaks out of this swing higher resistance retest to excess support so you can see that this area and your chat where the price break are off right in time to come in the future it could potentially act as a level right where the buying pressure could come in so this is what we call the retest so this is a useful right when the prices breakout right and you kind of miss the trade right you don’t have to chase the market because if you’re patient enough right more often than not the market could do a retest right and give you a much more favorable entry price instead of you know chasing the market and the highs okay and the last thing that I want to share with you is what I call the strong trend so this is when the trend is strong right and it typically is when the price is above the 20ma in this case is below the 20ma right so this is a strong downtrend so when the market is in a strong trend okay seldom would you get a retest so so when you sold it was the retest technique where the price you know say for example in this case a downtrend market breaks down retest breaks down retest breaks down retest over here right but when the trend is strong right selling pressure is just dominant right it’s unlikely you can get a retest because the buyers don’t even have the strength to push it back to the previous important resistance so this is where you know you want to be aware of this type of market condition and you know trade it accordingly so in this case this is a strong trend right and you notice that the price is below the 20 ma right so this is a clue to tell you that hey you know the trend could possibly be strong and you shouldn’t really expect it to retest the previous support term resistance right in this case price didn’t test it this is one price I would say it may or may not test it right and in this case this one over here the price didn’t test is a previous support and resistance so in this case right you can look to trade the breakdown right off the swing low so in this case you can see that the market pretty much had a breakdown on this swing low you can look to get short breaking down on this swinging low get short break down on this swing low and you know get shot and one taking to share with you to create this a strong trending market is that you want to be trading the breakouts or break down right when the price is as close as possible towards the tween EMA almost hugging in right that’s the kind of the best time of break downs that I like to create all right so in this case you can see that the price right it’s actually very close to the 20 ma right because he’s almost hugging in right the reason why you want it to be trading close to the 20 ma is that number one your stop-loss is tight – right imagine you just go shot over here let’s break down your stop-loss can just reference it from the swing high right say for example this level over here right and say somewhere over here right so all in all if a much tighter stop-loss right when you’re when the price is near the 20-period moving average compared to let’s see you just imagine right at this point if the price is far away from the 20 ma see for example the market breaks down over here it breaks this low right and you’re gonna go shot over here this swing low now you can see that the distance from here from here to the 20 ma is actually pretty done white and if you are going to use a stop-loss a buffer away from this swing high your stop-loss can be pretty much right and in fact after the market has made such a decent move down low it could also possibly you know retrace back higher where you now have to end your the pullback the retracement when it comes so this is why I don’t like shorting break downs right when the price is far away from the moving average I like when the moving average is near the price on the price is near the moving average it gives you a title stop-loss alright and you don’t really have to endured a retracement right if you know curve because chances are when the price is really hugging towards the moving average when he breaks down right you’ll be more Swift right a move is down Swifter right so in this case again you can see right this one price very much hugging close towards the 20-period moving average a descending triangle pattern and a moved on is pretty sweet right anybody view the end or the retracement right you already having a already having open profits to start with right combat to let’s say the price over here compared to let’s say the price in this case right it uh you shouldn’t break down this swing low right and then the market say is about to retrace you know if do you know you don’t have any open profits and you have to suffer the so called drawdown the trade as the market you know swings back against you and retest back this 20ma you may not get stopped out but two things right that is not working in your favor and I’m one if a larger stop-loss in number two you have to end your you’re more likely to end your pain right when the retracement comes because you have no open profit buffer alright so this is why I want to all I like to trade the breakouts in a strong trend when the price is close towards the moving average all right I think I covered quite a bit so you get my point alright so moving on how do you trade breakouts right so let’s talk about the entries first so when you trade breakouts right there are typically two ways to enter a trade number one you can use a buy stop order so what is a buy stop order so let’s talk about a general stop order so stop order is simply means right let’s say the market is an arranged it forms a build up right then you simply put a buy stop order above this high right a few pips or ticks above the high and if the price creates above it the order is similarly sent to your broker market to buy when the price is hit so you’re pretty much going long right when the market hit that price okay so the good thing about this approach is that if the breakup is real you pretty much are entering your treats right at a very favorable trade location a very near the breakout level right so this is the good thing right if the breakout is real however if the breakout is false right what’s gonna happen is the market breaks out and then closes back in the range so pretty much you got long near the highs when the market is a false breakout right so that is a pros and cons to it the other approach right to to trade the breakout is what I call waiting for a candle close so you’re simply waiting for the candle to close in your favor for us before you enter trade so again just it looks something like this right market is in range it breaks out and closes it right so you enter so go has a confirmation right that the market is about to break up before you enter the tree so the good thing about this is that it’s less prone to false breakup it doesn’t avoid false breakout totally it still could be a false breakout as the market over the next you can those you know collapse down lower and go back into the rich right but it’s a less often right and the the another downside to this is that sometimes right if the breakup is real right you would realize that the price right we’re close could be very high up see almost here so if you were to wait for a close you can see that you know you’re entering and a unfavorable trait location right where the move has really moved so much compared to the breakout level then you’re looking at earlier so there’s a the biggest downside I would say if you wait to for can no close right the upside is that you know it’s less prone to a false breakup alright so this is a couple of ways you can you know enter your tricks and as for stop-loss right here’s how I usually set my stop loss right when trading breakup so depending on the context of the breakout right you want to put your stop loss right at the level where your breakout is invalidated so again an example so market is in range forms a build up over here market breaks out you can look at this point in time you’re a self at what price level if the price comes to right would invalidate this entire break up trading setup and if you ask me right I would say this is the swing low over here if I were to set my stop-loss a buffer below it let’s say 180 are below it let’s say somewhere here okay if the market breaks out it shouldn’t come back to hit my stop loss level right because if the breakout is real the most it does is you know it break up that’s a retest at the previous resistance ten support and then continue higher from there if it breaks out and comes back all the way down hitting my stop-loss in this level chances are the breakup has still and I don’t want to stay in the trade any longer and I only know cut my loss and move on so usually when I set my stop loss right it’s based on this principle and what price level right would my trait be invalidated so let’s have a look at a few examples so in this one over here this is the retest technique right so if you want to go long on the retest right say let’s say you go longer the retest let’s see some way over here right where do you put your stop-loss you can set your stop-loss money here from this swinging over here right because if this level is too whole right the market shouldn’t come back into this this range over here if it does chances are the breakout has fill or if you gotta be more conservative you came in reference your stop-loss alright one eighty are from this swing low over here alright another example right let’s say the higher lows into support right the ascending triangle same thing if the market breaks out of this level right then I want to set my stop loss right 180 are away from this Laura some buffer about here because if the breakout is really shouldn’t go breakout come back all the way down you know breaking this neckline right if that happens chances are the breakout has feel so that’s a concept behind it okay now some of you might be wondering hey Raina what about my target profit where do I exit my windows I don’t really want to talk too much into this because this really depends on your trading go whether you wanna be a swing trader or whether you want to capture trends in the market so depending on your goal there are different techniques right to exit your trades right I have other videos on you know trailing stop loss and exist go and check that out but I don’t know you know talking talked about it in this this video okay so with that said right let’s do a quick recap number one you can treat breakouts right with built up ok higher lows into resistance is a sign of strength at the market is about to break out higher lower highs into support is usually what we call a descending triangle and it’s a clue that the market is about to break down lower right you can trade breakouts right when the market is in a strong trend preferably that the price is hugging near the 20-period moving average right and lastly alright I think I missed one down here which is the retest actually you can actually wait wait for the price to break out of a level and do a retest before getting on bought the trade and finally right regarding your entries all right you can read use the stop order or wait for a candle clues to enter a trade and your stop-loss right I typically like to set it one ETR below the swing low as a reference point okay so if you have enjoyed this video so far right you can go down to my website right for free trading strategies and techniques are to improve your trading results just go down to my website trading with Rainer come over here right the links at the top right just scroll down to the bottom depending what you want we’re going to learn how to write massive trends right to do more one-trillion your stop-loss right exist right you can download this ultimate trend-following guide right where I’ll share with you different techniques to actually Trulia stop-loss to right big trends in the market now if you’re a little how to better time your entries right if maybe you learned more than breakout maybe on a pullback support resistance go and download the ultimate guide to price action trading because that’s where I covered that in more details these two guys are completely free so just go down to my website trading with Rainer com click this blue button and I’ll send it to your email address for free alright so we that’s it I have come towards the end of this video if you enjoyed it please hit the like button write any feedback or comment let me know below I would really appreciate it and if you want to stay up to date subscribe to my youtube channel right and you always be updated whenever I publish a new video you


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