When you see a buildup form at resistance or support, you want to know THIS strategy.
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1:25 KEY Tips for Trading Breakouts #1
The reason I'm looking for a buildup is very simple, it tells you one thing. For example, in this case, it is formed at resistance and has a buildup form at resistance. What it's telling you is that buyers are willing to buy at these higher prices, right?
1:44 KEY Tips for Trading Breakouts #2
Think about this, resistance is an area where traders are looking to get in the market. Where you expect the price to come down. The fact that the price cannot come down and is hovering at these higher prices, for quite a while in fact, it's about like, what? 20, 25 candles? It's telling you that the buyers are just willing to buy at these higher prices. And this is a sign of strength. Traders are buying at such higher prices because they think that the price is about to breakout higher. So this is a sign of strength and whenever you see a buildup form at resistance, it's a sign of strength. And, the market could possibly breakout from here.
2:16 KEY Tips for Trading Breakouts #3
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 into support. Telling you that the sellers are willing to sell at this lower price. And so they're just the inverse. Okay?
2:24 KEY Tips for Trading Breakouts #4
The fourth technique I wanna share with you is what I call the re-test. So when the price breaks out, there are times where it comes back and re-test the level previous resistance tested support. So here's an example, price breakout of this height re-test the previous resistance now it can support, price breaks out of it again, re-test previous resistance now it can support. Price then breaks out of this swing high retest previous swing high now it can support. Price breaks out of this swing high or resistance re-test so that it can support. So you can see that, this area in the chart where the price breaks out off in time to come in the future it could potentially act as a level where the buying pressure could come in.
3:26 KEY Tips for Trading Breakouts #5
This is what we call the re-test. So this is useful when the prices breakout and you miss the train you don't have to chase the market because if you're a patient enough, more often than not the market could do a re-test and give you a much more favorable entry price instead of chasing the market and the highs. Okay, and the last technique that I wanna share with you is what I call the strong trend. So this is when the trend is strong and typically is when the price is above the 20MA and in this case is below the 20MA.
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