False Breakouts

I was listening to a trader the other day on a podcast. He said that he was never wrong with his trade’s, it’s just that his timing was off a bit. That made me laugh but it is true when you think about it. I certainly had that problem myself when I first started trading and I guess I still do to some extent if I am honest about it. One of my biggest issues when I first started trading was in chasing false breakouts. Here are some examples of how false breakouts look. You will notice they all have one thing in common. The price broke out of the distribution into trending, but the kijun sen was flat. There was not enough momentum to sustain the breakout. The first three examples are likely to be false breakouts. The bottom four charts are confirmed false breakouts. If you can get the idea of this it will save you a lot of grief. This applies to any time frame. In this case I have just shown all weekly charts.

These three charts will most likely be false breakout’s due to the flat kijun sen.

These four charts were false breakout’s. As You can see they all have the flat kijun sen in common.

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