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For me, I try and keep it simple. If I don't see a progressive squeeze of price that gets tighter and tighter towards the direction of where it's going to break out (e.g. The high of the bracketed area of the range), then it's unlikely to breakout successfully and hold on as a continual trend across time. In other words, a triangle chart pattern within the range in this case. For potential breaks on the high side, look for an ascending triangle pattern. And vice versa for the low side. And if it breaks out and rips off without the pattern then just leave it alone and look for a different setup. One post-breakout scenario - if it's then looking to trend from the breakout (and you can tell when you wait for the next exhaustion to arrive - whenever that may be as it depends on how long it'll continue to rip off from the breakout before it slows down - and the exhaustion subsequently results in a comparatively small retracement, say less than 50% of the initial or prior breakout move/s, as opposed to a big retracement that's 50% or more of the breakout move, which Mark mentioned here), then look for trend continuation setups. E.g. Look to enter on pullbacks. Another post-breakout scenario - it may reach a new high before retracing back to the original range area as before, and that would be an extended fakeout, e.g. Look to enter on mean reversion strategies. Having said that though, the chances of a solid and sustainable breakout into a new trend is much higher (and thus the chances of a fakeout is much lower) if it had a prior tightening squeeze pattern that resembles a triangle chart pattern (ascending for high range end, or descending for low range end) with progressively sideways looking candles clustering at the end of the range bound area... because this pattern suggests a consolidation and an acceptance in that price as a new key level.
Great video Mark! I trade breaks and retests quite a bit. I should add that if the price goes out of the range it's not a trade like you said, but if it closes outside the range (30min/1hr candle), you could take an agressive entry with SL below candle. A retest is the best way to have an accurate trade however. Fakeouts can also be traded with experience. Love your videos!
Mean Reversion and Break-Up/Down strategies are in contradictions and the probability of a Fake-Out is way higher than a Break-Up/Down. Very good to wait for a re-test, but it will not always work, especially when we have fear/greed in the market. This is a difficult issue to solve and what I have done is use Time-Of-The-Day when trading indices, and patience... BTW: What is the probability of a Fake-Out? Way higher and it could trigger a Mean Reversion.
Great video Mark and thanks for the always excellent content you put out there. I have been following your channel a long time, is it possible to get a new video on strategies for trading the indices and specifically the German DAX. Would be highly appreciated. There is a 2 years old video on that but it would be great to get a fresh update on DAX trading considering the current circumstances. Keep up the good work Mark and stay safe..
On a bullish idea... in a range, I'm always waiting for a break to the downside first as per Wykoff's theory and look to get in then. Because I can't handle the breakout action and emotions. too much goes on at that time, too many people watching that level.
Hello Mark, you are basically the only one trader I am listening to already… latterly I have a problem: I take a mean reversion trade, but then Market enters in congestion…so I get stopped like 0.25 -0.50 points just to see after market goes right to my first target and then to 2-nd...Imagine my frustration every time!!! I trade futures with a small account, I can't afford too large stops. So my question is: how to recognise early that the market has entered in a congestion? Because sometimes it's not a congestion but just double o triple bottom is forming...
👉 Trade with our Sponsor Broker: Trade Nation www.financial-spread-betting.com/ccount/click.php?id=95 Trade sensibly! 81.7% of retail investors lose money.
👉 We are seeking more contributors who can produce great video educational content about trading for our channel. If you think you have what it takes please get in touch by sending a message to traderATfinancial-spread-betting.com (remove the AT and substitute by @).
👉 It seems a lot of our viewers are non-subscribers. Make sure to subscribe to our youtube channel as we upload regular videos! If you hit the “Bell” icon (🔔) you will receive a notification on youtube every time that we upload a video on our channel. Bell icon hitters are super fans of our channel 🥰
For me, I try and keep it simple. If I don't see a progressive squeeze of price that gets tighter and tighter towards the direction of where it's going to break out (e.g. The high of the bracketed area of the range), then it's unlikely to breakout successfully and hold on as a continual trend across time. In other words, a triangle chart pattern within the range in this case. For potential breaks on the high side, look for an ascending triangle pattern. And vice versa for the low side. And if it breaks out and rips off without the pattern then just leave it alone and look for a different setup. One post-breakout scenario - if it's then looking to trend from the breakout (and you can tell when you wait for the next exhaustion to arrive - whenever that may be as it depends on how long it'll continue to rip off from the breakout before it slows down - and the exhaustion subsequently results in a comparatively small retracement, say less than 50% of the initial or prior breakout move/s, as opposed to a big retracement that's 50% or more of the breakout move, which Mark mentioned here), then look for trend continuation setups. E.g. Look to enter on pullbacks. Another post-breakout scenario - it may reach a new high before retracing back to the original range area as before, and that would be an extended fakeout, e.g. Look to enter on mean reversion strategies.
Having said that though, the chances of a solid and sustainable breakout into a new trend is much higher (and thus the chances of a fakeout is much lower) if it had a prior tightening squeeze pattern that resembles a triangle chart pattern (ascending for high range end, or descending for low range end) with progressively sideways looking candles clustering at the end of the range bound area... because this pattern suggests a consolidation and an acceptance in that price as a new key level.
Great video Mark! I trade breaks and retests quite a bit. I should add that if the price goes out of the range it's not a trade like you said, but if it closes outside the range (30min/1hr candle), you could take an agressive entry with SL below candle. A retest is the best way to have an accurate trade however. Fakeouts can also be traded with experience. Love your videos!
The past few videos mentioning "sensible stoploss placement" is helping me to understand the purpose of stoploss. Thank you for the videos.
Awesome advises. Range Breakout was one of my fav strategies when I started trading 9 years ago!
Good stuff!
This was a great follow up to the range versus flag video! Especially considering I often trade flags and then get stuck in a range.
Hi Mark! Would you approach it the same way on the intraday play?
Mean Reversion and Break-Up/Down strategies are in contradictions and the probability of a Fake-Out is way higher than a Break-Up/Down.
Very good to wait for a re-test, but it will not always work, especially when we have fear/greed in the market.
This is a difficult issue to solve and what I have done is use Time-Of-The-Day when trading indices, and patience...
BTW: What is the probability of a Fake-Out? Way higher and it could trigger a Mean Reversion.
Great video Mark and thanks for the always excellent content you put out there. I have been following your channel a long time, is it possible to get a new video on strategies for trading the indices and specifically the German DAX. Would be highly appreciated. There is a 2 years old video on that but it would be great to get a fresh update on DAX trading considering the current circumstances. Keep up the good work Mark and stay safe..
I'm sending your feedback to Mark to see if its worth doing another video on the DAX 🙂
On a bullish idea... in a range, I'm always waiting for a break to the downside first as per Wykoff's theory and look to get in then. Because I can't handle the breakout action and emotions. too much goes on at that time, too many people watching that level.
You deserve more subscriber!
Hello Mark, you are basically the only one trader I am listening to already… latterly I have a problem: I take a mean reversion trade, but then Market enters in congestion…so I get stopped like 0.25 -0.50 points just to see after market goes right to my first target and then to 2-nd...Imagine my frustration every time!!! I trade futures with a small account, I can't afford too large stops. So my question is: how to recognise early that the market has entered in a congestion? Because sometimes it's not a congestion but just double o triple bottom is forming...
I'm sending this to Mark; he may well address your question in a video in future.
@@ukspreadbetting Ok, thanks, he is a real trader, one of the few on internet...to understand that you have to been there...
great post. thanks
From somalia big fun.
Great Stuff
Great video
Good content, thank you
👍🏻👍🏻
could you not find 2 highly correlated pairs, and then hedge 2 trades for long and short, and then cancel the loser when the direction is confirmed?
Volume!