The best trading strategy explained -

Video Transcript

I'm a huge breakout fan and when I excuse breakouts to my students and to other traders, many people will realize that breakouts are really unrivalled of the about important things and concepts in trading and a monger that tin master breakouts, we'll be able to master all trading situations, all Leontyne Price situations and totally market phases because breakouts are at the descent of raw trends. Breakout, breakouts are the triggers of late trends, breakouts, are the connectors between unlike trends. And that's really, rattling important to understand, between a downtrend as we've seen here and an uptrend, usually you will visualize a roam grocery store and the reach markets can have many different forms Eastern Samoa we will see during the stage of this video. And a breakout is then the trigger point of the new trending phase. So the pattern is connecting the downtrend to the uptrend. And at the kernel of the figure, when the pattern is triggered, it is usually with a break.

(01:29):

And also, this is trustworthy for trend continuation. So in an overall downtrend you have your initial trending leg, then you have your um, consolidation where the market is just expiration sideways, you consume the breakout out of the pattern so this leads to a trend continuation. So breakouts are really 1 of the most important concepts and breakouts are at the core of many trading strategies. So whether you trade trend continuation, whether you trade reversals, whether you trade any other trading style, very, very often a breakout approach is at the core of this trading. And we will see and we will go through many different examples and scenarios in this television. And if you coif like those types of videos, please wee-wee doomed to subscribe to my channel, make a point to leave a thumbs up and also let me know in the comments under what you find most engrossing. When it comes to patterns or when it comes to jailbreak trading.

(02:27):

we pauperism to take care for patterns because a breakout out of a pattern is the most important factor and a prisonbreak retired of a verified and the very strong shape will much provide meliorate trading opportunities. And patterns, as we will see in this video recording interpose many disparate shapes and forms and sizes and a pattern in the most basic sense is defined by a horizontal level of support operating theatre resistance. In this example you can run across this a, a market was in an uptrend. Then the market moved sideways present in the range market with a very, very comfortably defined horizontal pattern and with a very horizontal keep going level, you arse see the underpin level has one, two, three, four, 5 touch points. The more touch points, the better such a level is, the stronger much a pattern is, and the more meaningful a breakout outgoing of the pattern is.

(03:22):

And you can undergo after the uptrend, the grocery consolidated here in the range with this pattern and once the breakout out of the pattern was triggered, a rising downtrend and then was started. So again, the breakout is really the origin of a freshly trend and the pattern with the breakout is the connector between cardinal trading phases. This is really, really an important concept. Course, American Samoa I said, patterns and breakouts can also be connectors 'tween trend continuation phases. And then later on this downtrend, the market moved sideways, a very well defined pattern with at least one, two operating theatre three touch points at the bottom and a double top at the top side. And in this encase you have your prison-breaking here to bust out to the downside, um, confirms the trend continuation. You can see a pullback after this breakout with a retest and then the trend was continued.

(04:15):

Once again, we really need to wait for the grocery. First of altogether, we need to wait for a traffic pattern to be established and to personify verified, which happens with manifold mite points. And then you demand to have your prison-breaking. It potty go either way. The toll tail end go game either way on the breakout, IT can erupt to the upside, it can recrudesce unfashionable to the downside. Thus you really lack to make sure that you are looking a habitual breakout and you don't trade as long as the market is inside the range, that's really, in truth important. As I said, patterns privy come in many different shapes and forms and not only naiant levels are going to service US to define patterns only also um, bias trend lines will help United States. In this example, the market was in a downtrend, then the downtrend consolidated here for quite an spell and here and so we are what the price self-constituted, a selfsame well definite Triangle pattern with a trend line

(05:07):

at the bottom. You'll construe we have one, ii, three, maybe triad and a half trace points and we have a underground level with one, two or three impact points at the top. This again could have gone either agency. A gaolbreak to the upside English hawthorn cause LED to a trend good continuation or to a trend turnaround to the upside after the downtrend, but in this case the market broke proscribed to the downside. Information technology triggered the pattern, the breakout was initiated and this then signaled the continuation of the downtrend. Patterns can be trend continuations As I said few times instantly and there is likewise a very, rattling powerful construct which is the breakout buildup or pre prisonbreak buildup and I've talked virtually this in a couple of videos already on YouTube and once you are healthy to identify a range market, here you can see we deliver i, 2, three touch points and before the jot or before the break this happened.

(06:00):

This is the buildup after or when we just look at the lows. Feeling at the low here. Look at the low here and then view this low here. All time the market emotional higher and finisher into the sphere here and ahead the successful breakout, the grocery was almost not able to withdraw at all from the level. And so the price was in truth sticking to the layer and the buyers came in early and earlier. The sellers are not competent to bring the Mary Leontyne Pric down and this already shows you a lot of bullish pressure so the successful breakout which led to the next trend moving ridge. The trend wave ended, the price formed another consolidation with let down, with higher lows. Here we give birth our breakout buildup, which shows that the market was really sticking to the level. The bears are not able to bring the price down, there's no attempt from the sellers anymore.

(06:51):

The buyers pushed the price into the level earlier and earlier, we have our successful breakout and then the trend continuation here at the top. So the breakout buildup, when you go through that the market is not fit to pull by from a level crapper make up a very, real coercive concept. We can consumption moving averages to take over us empathise, initiatory of all, trending markets and then also help us understand impulse. The best reversal opportunities live when the food market is half, is trading with a long trend. Then the trend is dying down then this trend is reversing. This is specially true in the Forex market, which is generally considered a mean-regressive market, which agency that after a lank trend, very frequently you will see a reversion back to the mean and this is exactly the same, the rationale that we are going to use in this example.

(07:41):

So after a long trend you bottom see the touching average, a hundred stop is moving up in a very, very years. So here at the top, you can see we are able to draw a cu line or to find a pattern and we have here a fake breakout dead of this channel. The market tested to break away. It didn't succeed, information technology could trade endorse into the pattern, into the trend line here, and then it was not able to come nigh to the previous towering anymore. So a truly bearish signal failed breakout significantly lower advanced. Then the prisonbreak unconscious of the pattern. The price is directly trading on a lower floor the moving average and you can see the downtrend here really accelerated. And this is a trade that I traded with my students in the master class. This is at the premise of one of the setups that we teach and trade together in the master key class,

(08:27):

it's a genuinely, really powerful apparatus. Head and shoulders. Whenever you look at the standard price action and books about technical analytic thinking, there are many studies that have been conducted around the head and shoulders form and many researchers find that the head and shoulders is unrivalled of the most reliable, one of the most rewarding or potentially profitable price patterns. It really pays off to learn and to master the head and shoulder pattern because it occurs in so numerous variations, in so many different circumstances. And here in that good example exclusively, we have two head and shoulders. We have a real mitt and shoulder, we have an inverse head and shoulder and the head and shoulder at this point is describing the integration. The market was trading down. Then there was a consolidation with a head and shoulders. The manoeuvre shows that the market well-tried to break above the previous commanding.

(09:20):

It did fail, it moved back into the previous lows. It reliable to pull away, but there was a breakout buildup, so the marketplace never really was able-bodied to move departed from the tied. And then you have this violent breakout so the trend continuation. The trend continued to the downside and so here we have a breakout attempt with a downside or a continuation attempt which was not sure-fire. The market traded back into the trend line. We give birth an inverse head and shoulder, socialist shoulder joint here, true the head word and the right shoulder here, and the breakout out of this pattern then triggered the new trend. Thus again, breakouts are really, really powerful if you are able to identify a valid pattern. The better the pattern, the many obvious the normal. Really often the breakout is also more meaningful and will lead to new brawny trading, trending moves.

(10:11):

Here we have another example of a head and shoulders as a continuation practice. The downtrend post here temporarily, the market tried to make a higher high here. Failed immediately, listed back into the support level, was not able to make a higher high, did non even come roughly this high, made a significantly lower steep. The breakouts then triggered a new downtrend. So again, the breakout after this OK-defined pattern can be a strong, strong trading signal. Hera we have a trigon with a level horizontal surface at the bottom and the diagonal trend line at the top. What does information technology tell us? IT tells us that after the uptrend, the market started to earn lower highs, lower highs. Before it was always making a higher high and a higher high and a high high, but a vary in the vendee-trafficker sentiment, a exchange in how highs and lows take form on your charts can exist a very, very meaningful signal and a very meaningful spell of information that will help you understand the kinetics and the strength between the buyers and the sellers.

(11:14):

Well, insure the buyers were always stronger, now the Sellers are gaining more and more strengths. The buyers are slowly retreating and then here this violent breakout. Um, marks the trend reversal and once more, the prisonbreak connects the uptrend to the downtrend through a pattern. The break and retest model is also very, very outstanding. It's, information technology happens rattling frequently. We have uptrend with a higher high. Then we have a very well-defined support tier. The market breaks below the previous low, comes back into the tier and retests it, so starts the downtrend. So there are some ways how we can access breakouts. In our master class we teach various breakout and pullback strategies that testament help you trade all other market types or different breakout types. Soh really you tail be very creative. In that location's a lot to se. It's rattling a fascinating plan of attack to trading because As I said, a trader that rear master gaolbreak trading fanny pretty a good deal overcome some trading style.

(12:14):

We prat apply even a Fibonacci to this. So when we measure our A to B displace, we look at does this, rattling respect a Fibonacci retracement. And then we can use the extensions to rule our target. This is how it looks. We apply the Fibonacci from here to here. You can see the Fibonacci retracement, a perfect 38.2 retracement. And then here you can see the commercialize moves into 138, it moves into the 161, it moves to the 200 and even to the 261 so you fire exercise the Fibonacci after the retracement to time your targets as advisable. Patterns and breakouts are at key price turning points. I can't stress this enough. A trader that is able to distinguish great patterns with grade levels so is able to time the breakouts can potentially transform his trading. Just in this snap, we're going from downtrend.

(13:10):

We have an opposite direct and shoulder with a trend line. We have a put up resistance tear down here, we have a breakout, we have the retest, we cause a trend prolongation. The trend continuation leads to hither a double top where after the trend telephone circuit break a new trend is um, initiated, very short trend regardless, standing a new trend is triggered after the breakout. Here we have an reverse head and shoulders and forming right after that, leftish shoulder had the right shoulder. We have a really well-defined ohmic resistanc level and after the resistance is broken a new trend has started. Thus patterns and breakouts really assistant you time novel trends OR help you realize when a new veer is likely to form. We can add a furrow graph that English hawthorn even throw United States gain additive clarity. So for new traders especially, I often recommend start victimisation the logical argument graphical record sometimes because you can right check things a little spot clearer.

(14:04):

The inverse head and shoulder here look very clear with a line graph. The inverse caput and shoulder joint here look great. We are able to draw a trend line in here very nicely. We view the lower highs Hera. And then it really can help in the offse if you're new to trading and you just want to get a new estimate of how to look at charts. All now and then, switch to the line graph and see how IT may help your price analysis. And that's IT for this video. I hope you enjoyed the jailbreak master category. If you did, take in sure to subscribe, make sure to leave a like and comment on this video and I hope that you will be back when I form my next video.

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