2009.05.30 RULE OF THUMB: DO NOT REVERSE ON BREAKOUT CANDLES
The pirates were discussing trading after the market closed. One topic was trading reversals. The general consensus was NOT to enter a reversal on a breakout candle. It's better to let the candle close and then wait to see if price is reversing.
In the first example, you can see price broke through dynamic resistance and pushed the red dot up. A reversal trade would have been a loser.
In the next example, you can see price broke through the upper Bollinger band and reversing on a breakout candle would have been a loser.
RULE OF THUMB: DO NOT ENTER A REVERSE TRADE ON A BREAKOUT CANDLE.
2009.05.30 RULE OF THUMB: DO NOT REVERSE ON BREAKOUT CANDLES
Moderator: moderators
- TheRumpledOne
- rank: 10000+ posts
- Posts: 15560
- Joined: Sun May 14, 2006 9:31 pm
- Reputation: 3035
- Location: Oregon
- Real name: Avery T. Horton, Jr.
- Gender:
- Contact:
2009.05.30 RULE OF THUMB: DO NOT REVERSE ON BREAKOUT CANDLES
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!
Please do NOT PM me with trading or coding questions, post them in a thread.
Please do NOT PM me with trading or coding questions, post them in a thread.
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.
-
- rank: <50 posts
- Posts: 28
- Joined: Tue Apr 07, 2009 4:31 pm
- Reputation: 0
- Gender:
While I understand the convention, how far do you consider this rule of thumb? That is, down to what timeframe? I typically hold off on M15 breaks, but find myself continually breaking the rule of DTB to go against the H1 candle if I sense the price action is slowing/reversing and other surrounding circumstances support (ie approaching S/R etc). Perhaps I've just been lucky, but the first 3 months of trading this have worked quite well for me.
-
- rank: <50 posts
- Posts: 1
- Joined: Thu May 21, 2009 3:47 pm
- Reputation: 0
- Gender:
- TheRumpledOne
- rank: 10000+ posts
- Posts: 15560
- Joined: Sun May 14, 2006 9:31 pm
- Reputation: 3035
- Location: Oregon
- Real name: Avery T. Horton, Jr.
- Gender:
- Contact:
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.
- TheRumpledOne
- rank: 10000+ posts
- Posts: 15560
- Joined: Sun May 14, 2006 9:31 pm
- Reputation: 3035
- Location: Oregon
- Real name: Avery T. Horton, Jr.
- Gender:
- Contact:
- TheRumpledOne
- rank: 10000+ posts
- Posts: 15560
- Joined: Sun May 14, 2006 9:31 pm
- Reputation: 3035
- Location: Oregon
- Real name: Avery T. Horton, Jr.
- Gender:
- Contact:
Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.
Thank you for your support.