I see a lot of charts that say buy/sell the breakout. Problem is how do you do that? Well this is what In look for. I am looking for a correction around the trend line (TL). I prefer a break of the trend line. If price breaks the TL and then follows it back in a shallow flag, it is most likely going to break in the original direction. I draw a LTF (lower time frame) TL and enter on a break of the LTF flag.
I need to see at least 3 LTF sideways or shallow pull back candles. If price does not break within 5 candles I reassess as this will mean potentially a larger correction is imminent.
If price pulls back sharply I wait for another strong candle to break the TL and start the process again.
If price goes a short way and starts to correct again I take my trade off for a small profit or move my stop to break even as this indicates it may be returning to the wrong side of the TL.
I put my stop above the last pivot in the structure.
This chart is showing the LTF candles of a break of the 4 hr TL.
Educate yourself, create your own trade plan, Validate your trades with other trader's ideas. Own your trade good or bad.
Kommentar
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A little more clarification on entry and stop placement how I trade the break out.
Marvin Thanks for the post and the encouragement. I usually use a 1 lower time frame than the post. Most of my charts are based on the 4 hr so the LTF is one hour. However a one hour chart would use a 15 min. As you know as you go lower price action is more susceptible to deflections from its path by news or other events we don't understand. I find the 4 hour can withstand most news events without going astray. Hope that helps.
Marvin
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Thanks for taking the time to post this, and all your other charts. I just discovered you and will be following along. A question. Do you usually, perhaps always, use the 15m chart as your preferred LTF?. All the best mate.