Master Breakout Trading (Advanced Lesson)
Published: 2019-05-09
Status:
Available
|
Analyzed
Published: 2019-05-09
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The Pound Swiss trade shown at the beginning was part of the EAP training program, which provides 3-5 weekly email alerts for trades based on learned strategies.
"the pound Swiss trade you saw at the beginning of the video also was a part of the EAP training program we send traders 3 to 5 email alerts each week of trades that we plan to take based on the strategies you learn in that course"
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Identifies a specific consolidation breakout on the Pound Swiss currency pair with resistance at 1.3166, which was tested three times. This is presented as a successful trade example.
"so in this specific case on the pounce whist this was a consolidation breakout because we have a market that pushed down to a support level push back up created a resistance level right around one point three one six six and if you'll notice at this level we consistently once twice and for a third time found resistance here at this level"
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A rule for a consolidation breakout strategy is to wait for the market to pull back and touch the previous resistance level (around 1.3166 in this example) after a breakout.
"after this breakout I want to wait for the market to pull back and at least touch that previous resistance level so that previous resistance level around one point three one six six has to be touched"
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A 'close above candle' pattern will be used as an entry signal for long opportunities in the described forex trading strategy.
"for the sake of this video what we're gonna be doing is using a close above candle as a entry reason"
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Summarizes the conditions for a consolidation breakout strategy: at least two tests of resistance, a breakout, optional rising support, a pullback to the resistance level, and an entry signal like a 'close above candle'.
"the conditions we just talked about level of structure that's been tested at least twice as resistance breakout of that level added confirmation can be rising support levels after the breakout of that level a pullback to that level and an entry reason being something like and you can use your own entry whatever you want to use for today's examples where needs to close above an entry reason like a close above candle"
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Another trade on Pound Swiss exhibited similar conditions to the previously discussed one and resulted in significant upward movement and hitting targets over several days.
"had a very similar set of circumstances that allowed us to get involved in that trade which ended up pushing up over the next few days and hitting some pretty massive targets"
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The presenter will analyze a specific trade scenario as if it were happening in real-time, without knowing the outcome, to demonstrate the strategy.
"so I have circled them just to save time on the video and here what we're gonna do is break this this trade down in the same way as if it hasn't happened yet"
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A specific rule for determining the pullback level after a breakout is to use the highest body of any candle within the previous resistance zone. In this example, this level is identified as 1.2586.
"what I do is for the resistance level or support level whatever structure level gets broken out of I put a whorls on at the highest body of that resistance level and for this specific situation this is the highest body of that resistance level when it comes to candles these candle bodies are lower these candle bodies are lower these candle bodies are lower these are slightly lower so this is in fact the highest body of any candles for this resistance level and that's the point that I want to use after my break out right we have our break out right here after that break out this is the level I'm using is where the highest candle bodies are in that resistance level and that area is one point two five eight six"
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Confirms that after a pullback to the established resistance level, a 'close above candle' pattern serves as the entry trigger for a long trade, exemplified by a large green candle.
"remember our rules we get a pullback to that level of resistance then what do we want to see a close above candle for the sake of this video what is this right here this very large green candle is in fact a close above candle after touching our level of resistance so this is the preparation of creating exact rules for a strategy"
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This refers to a specific trade on Pound Swiss that was entered based on the discussed strategy and subsequently moved significantly higher over a few days, hitting large targets.
"so right here that's that's the reason we entered this trade that's the trade you just looked at on the pound Swiss had a very similar set of circumstances that allowed us to get involved in that trade which ended up pushing up over the next few days and hitting some pretty massive targets"
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Defines the placement of the horizontal line for pullback analysis: at the lowest body of a support level or the highest body of a resistance level that has been broken.
"your horizontal line needs to go at either the lowest body of a candle you can see on the support level which for this level here it would be right down here because it's the lowest body of that support level it won't you want it to either be the lowest body or the highest body of a resistance level is where your horizontal line goes after the breakout"
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Identifies a scenario with tested support, a breakout, and decreasing resistance levels as confirmation for a potential trading opportunity.
"we now have a level of resistance estimable Talent we have a level of support tested multiple times we have our breakout of that support we also have our added confirmation of decreasing resistance levels resistance levels getting lower and lower"
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For a shorting opportunity after a support breakout, the strategy requires a pullback to the lowest body of the support level, followed by a 'close below candle' signal.
"we're waiting for a pullback remember we're on the lowest body of the support level which is right here so we're waiting for a pullback that at least touches that and they were waiting for a closed below candle"
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Specifies that the entry for a short trade occurs only when a candle closes below the identified low of the support level, which happened at this specific point.
"here's the lows nothing's closing below those until right here and we get our entry candle closing below the lows right here"
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Suggests methods for setting stop losses in the trading strategy, including placing them above the entry candle, the previous swing high, or using an ATR indicator.
"for stops and targets I would suggest testing this with stop losses possibly above the entry candle or possibly above the previous swing high using something like an ATR indicator or something like that"
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Reiterates key conditions for the strategy: at least two tests of a structure level (resistance or support), a breakout, and a pullback to a specific level (e.g., the lowest body of the support level for a shorting example).
"multiple tests of a level of structure resistance or support at least two after that waiting for the breakout after the breakout having set in stone rules for where what level you will the market a pullback to in touch in our case in a shorting example the lowest body of that support level"
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The described consolidation breakout strategy is not time-frame specific and can be applied to various chart intervals, from 15-minute to daily, with the core concept remaining consistent.
"this is not time frame sensitive you can do this on a date trading time frame such as the 15-minute chart the 30-minute chart look out for the spread on lower timeframes one hour you can go up timeframes if you're someone with a busier schedule daily chart it doesn't matter the concept will remain the same"
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To develop a trading plan, it is recommended to backtest the strategy by analyzing at least 100 historical trades on relevant pairs and timeframes to understand future probabilities.
"you're gonna go through historical data you're gonna test every situation you can find up to at least 100 trades maybe more to give yourself a good example of the probabilities that could occur in the future"
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A crucial step after backtesting is to create a risk management plan based on the observed drawdown and potential losses from the strategy.
"after you have that you need to create a risk management plan around those results that you're comfortable with based on the drawdown that comes with based on the drawdown you see after creating the strategy after actually testing it through historical data the drawdown you see because you will lose trades create a risk management plan around that"
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The presenter emphasizes the significant effort and time invested in developing and refining the rules for the trading strategy.
"I spent hours and hours and hours creating rules testing them finding the ones that worked best"
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The video aims to provide viewers with a complete understanding of how to profitably trade consolidation breakouts in the forex market.
"by the end of the video you were gonna have a complete grasp of how to trade consolidation breakouts for profit in the forex market"
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A specific trade on Pound Swiss is being analyzed using consolidation breakouts.
"we were looking at this specific trade here on the pounce list that we're looking at on the chart now"
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A prerequisite for a consolidation breakout is that the consolidation phase must occur first.
"we need the consolidation to happen first so that has already happened here in this specific case"
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For a consolidation breakout to be valid, the market must first enter a consolidation phase.
"we need the consolidation to happen first"
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A rule for a consolidation breakout strategy is to wait for a pullback to touch the previous resistance level after a breakout.
"after this breakout I want to wait for the market to pull back and at least touch that previous resistance level"
Pending
A 'close above candle' pattern will be used as an entry signal for the consolidation breakout strategy discussed.
"for the sake of this video what we're gonna be doing is using a close above candle as a entry reason"
Pending
A key condition for a long consolidation breakout trade is a resistance level that has been tested at least twice.
"a level of resistance for long trades that has been tested at least two times"
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A breakout of the established resistance level is a necessary condition for a consolidation breakout strategy.
"we need to see a break out of that level"
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After a breakout, a pullback that touches the previous resistance level is a required condition for the strategy.
"a pullback to that level"
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The strategy involves a resistance level tested twice, a breakout, potential rising support, a pullback to the resistance, and entry based on a close above candle.
"the conditions we just talked about level of structure that's been tested at least twice as resistance breakout of that level added confirmation can be rising support levels after the breakout of that level a pullback to that level and an entry reason being something like and you can use your own entry whatever you want to use for today's examples where needs to close above an entry reason like a close above candle"
Pending
The Pound Swiss trade, entered based on the discussed strategy, resulted in significant gains over subsequent days.
"that allowed us to get involved in that trade which ended up pushing up over the next few days and hitting some pretty massive targets"
Pending
A specific rule for placing a horizontal line for consolidation breakouts is at the highest body of the resistance level.
"for the resistance level or support level whatever structure level gets broken out of I put a whorls on at the highest body of that resistance level"
Pending
The level for a pullback in a consolidation breakout strategy is identified by the highest candle bodies in the resistance area, specifically 1.2586 in this example.
"after the breakout this is the level I'm using is where the highest candle bodies are in that resistance level and that area is one point two five eight six"
Pending
Following a pullback to the resistance level, the entry signal for the consolidation breakout strategy is a close above candle.
"remember our rules we get a pullback to that level of resistance then what do we want to see a close above candle"
Pending
The defined strategy requires at least two tests of resistance, a breakout, a pullback to that level, and an entry confirmation such as a close above candle.
"a level of structure that's been tested at least twice as resistance breakout of that level pullback to that level and an entry reason like a close above candle"
Pending
The horizontal line for a consolidation breakout strategy is placed at the lowest body of a support level or the highest body of a resistance level.
"your horizontal line needs to go at either the lowest body of a candle you can see on the support level which for this level here it would be right down here because it's the lowest body of that support level it won't you want it to either be the lowest body or the highest body of a resistance level is where your horizontal line goes"
Pending
Decreasing resistance levels can serve as additional confirmation for a consolidation breakout strategy, especially after a support breakout.
"after the breakout of that support we also have our added confirmation of decreasing resistance levels resistance levels getting lower and lower"
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A 'close below candle' is used as an entry trigger for shorting opportunities in a consolidation breakout scenario.
"waiting for a closed below candle"
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Developing a trading strategy involves setting rules for stops and targets, then testing these rules on historical data to determine success probabilities.
"after you set your rules for stops and targets you have the rules you need for a strategy you can go back through historical data those are rules that you can test over and over in every situation and you can go through the market and find your probabilities now you can find the probabilities of success with this strategy"
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It is crucial not to skip any steps in the process of developing a trading strategy and plan, as doing so significantly reduces the chances of success.
"after you do all of that and do not skip any of those steps because if you do you are diminishing your chances of success a terrible amount a ridiculous amount"
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The speaker emphasizes the difficulty and importance of backtesting trading rules, noting they spent extensive time developing and refining them.
"as hard as it is to do the back testing as difficult as it is trust me creating rules for this that wasn't easy I spent hours and hours and hours creating rules testing them finding the ones that worked best"
Pending
The Pound Swiss trade was part of the EAP training program, which provides weekly trade alerts based on learned strategies.
"the pound Swiss trade you saw at the beginning of the video also was a part of the EAP training program we send traders 3 to 5 email alerts each week of trades that we plan to take based on the strategies you learn in that course"
Pending
After a consolidation breakout, wait for the market to pull back and touch the previous resistance level.
"after the breakout I want to wait for the market to pull back and at least touch that previous resistance level so that previous resistance level around one point three one six six has to be touched"
Pending
A 'close above candle' will be used as an entry reason for the trading strategy discussed.
"for the sake of this video what we're gonna be doing is using a close above candle as a entry reason"
Pending
Following a breakout, a pullback to the tested resistance level is required, followed by a 'close above candle' for entry.
"we get the breakout then what do we need to see a pullback that touches our one point three one six six or the resistance level that's been tested multiple times after that what are we looking for let's zoom in here remember the entry reason is that close above candle"
Pending
A complete strategy requires: resistance tested twice, breakout, optional rising support, pullback to resistance, and an entry signal like a 'close above candle'.
"for the conditions we just talked about level of structure that's been tested at least twice as resistance breakout of that level added confirmation can be rising support levels after the breakout of that level a pullback to that level and an entry reason being something like and you can use your own entry whatever you want to use for today's examples where needs to close above an entry reason like a close above candle"
Pending
The described consolidation breakout strategy on the Pound Swiss resulted in significant upward movement and large target achievements over several days.
"pound Swiss trade had a very similar set of circumstances that allowed us to get involved in that trade which ended up pushing up over the next few days and hitting some pretty massive targets"
Pending
When identifying a consolidation breakout level, place a horizontal line at the highest body of the resistance candle.
"for the resistance level or support level whatever structure level gets broken out of I put a whorls on at the highest body of that resistance level"
Pending
After a breakout of support, wait for a pullback that touches the support level, followed by a 'close below candle' for entry.
"we're waiting for a pullback that at least touches that and they were waiting for a closed below candle"
Pending
For a shorting opportunity after a support breakout and pullback, the entry signal is a 'close below candle' at the support level.
"as we can see here we get our breakout right here our pull back up after we touch this level this does not this candle here this red candle after the touch does not close below here here's the lows nothing's closing below those until right here and we get our entry candle closing below the lows right here"
Pending
Stop losses for this strategy can be placed above the entry candle or the previous swing high, potentially using an ATR indicator.
"for stops and targets I would suggest testing this with stop losses possibly above the entry candle or possibly above the previous swing high using something like an ATR indicator or something like that"
Pending
A profitable consolidation breakout strategy requires at least two tests of a level, a breakout, a pullback to the specified horizontal line (lowest body for support, highest for resistance), and an entry signal like a 'close above/below candle'.
"you want at least two two tests of resistance or support you want to see the breakout of that resistance or support level your horizontal line needs to go at either the lowest body of a candle you can see on the support level ... or the highest body of a resistance level is where your horizontal line goes after the breakout you want to pull back that at least touches that level that horizontal line you placed and then you want to see an entry reason like a close above candle"
Pending
The consolidation breakout strategy is not timeframe-sensitive and can be applied to various chart intervals, including 15-minute, 30-minute, 1-hour, and daily charts.
"you can do this on a date trading time frame such as the 15-minute chart the 30-minute chart look out for the spread on lower timeframes one hour you can go up timeframes if you're someone with a busier schedule daily chart it doesn't matter the concept will remain the same"
Pending
To validate a trading strategy, test it on at least 100 trades across different pairs and timeframes, as the concept is universally applicable.
"hundreds of trades at least 100 trades per pair per timeframe this is not time frame sensitive you can do this on a date trading time frame such as the 15-minute chart the 30-minute chart look out for the spread on lower timeframes one hour you can go up timeframes if you're someone with a busier schedule daily chart it doesn't matter the concept will remain the same and you're gonna go through historical data you're gonna test every situation you can find up to at least 100 trades maybe more"
Pending
It is crucial to follow all steps of strategy development and testing, as skipping any will significantly reduce the chances of trading success.
"after you do all of that and do not skip any of those steps because if you do you are diminishing your chances of success a terrible amount a ridiculous amount"
Pending