Tuesday, February 15, 2011

Trading Breakouts

While trading breakouts it is necessary to see that the breakouts confirm moves in multiple time frames. e.g. a breakout in 4 hrly time frame must be possible. Also such breakouts need to be supported by alignment of averages in a time frame lower. If the averages are not stacked along with the breakout then one needs to wait for the alignment. Else a wide, sharp and fast price fluctuation can make a false breakout and subsequently the price can reverse substantially leading to sorrow.

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