ilmscore | Prediction Details
"we have a move down indicating that we're in that downtrend then what happens well after our most previous move down right here let's thicken that up and change color black make it easier see then we have a period of consolidation we have a market that comes up to a resistance level makes a swing low comes up to that same resistance level makes a higher swing low and then break structure breaking out into what we call a false breakout right here is a few levels of resistance the market was holding so the market broke out of those levels of resistance now what is the difference between a false breakout and a breakout well for me and the rules that I use for this type of situation is a false breakout if it is a breakout to the upside is only a false breakout if the market is in a downtrend what do I mean by that because I know that may have gotten a little bit confusing whenever I'm trading breakouts I'm looking for a market let's consider I'm trading a bullish breakout I want to see a market in a bullish trend and then the period of consolidation and then the breakout that's how I would be trading bullish breakouts and the opposite for a bearish breakout whereas if I'm trading false breakouts what I'm looking for less taking consideration the market is in a bullish trend and then we have something that looks like this well right here I know that's my false breakout situation and that I'm just waiting for my entry reason I know that I have my condition which is the markets in an uptrend I have the second condition which is a false breakout to the downside and then I'm waiting on an entry reason to go higher and we're gonna discuss a little more about the integration here in just a second so the way I determine the difference between a breakout and a false breakout is by understanding and knowing what the underlying trend of the market is I hope that all made sense to you guys and I hope that that was really clear for you guys if not just go back and re-watch that section of the video a couple of times that I'm sure it will all make sense so now we are in this current situation we are currently in a downtrend here in we have started this period of consolidation making resistance levels marked out with our black line here and then the market breaks out of those resistance levels what do we call that that's called our faults break out now what are we looking for well now since we have our conditions met markets in a downtrend markets broke out of a resistance level giving us our false breakout now we look for an entry reason and for me that entry reason is a breakout of the bottom trendline so oftentimes when in a downtrend the market when in its period of consolidation that it's pulling back in when in its retracement will make higher lows as it makes higher lows I will draw a trend line throughout those higher lows once the market does its false breakout to the upside then my indication to sell that market considering we're in a bear trend right now my indication to sell that market is a break below that bottom trendline so as you can see I'll place my profit tool on here at the break below that is where we opened our position place a horizontal line on the screen so you can see that's right where this position was opened right here we had a stop loss of a little over 70 pips our first target was hit pretty quickly market pushing down within a few hours and taking out that first target we moved our stop balls to break-even at that point and we have continued to manage this position all the way down to this point when we are 228 pips in profit here using this false breakout technique"
By The Trading Channel (The Trading Channel) | November 25, 2017 | Pending
From video
How to TRADE a false BREAKOUT (Live trade example) 00:03:04 - 00:06:54
Interpreted Prediction
The speaker successfully traded a false breakout on USD/JPY, entering a short position after the market broke above resistance in a downtrend and then subsequently broke below the lower trendline of consolidation. The trade resulted in 228 pips of profit.

Prediction Details

Ticker
USD/JPY

Comments

0 comments

Be the first to share your thoughts.

Like this prediction?

Join to make your opinion count.