I personally think that typical breakthrough trading is rarely the best way to trade, because most price action traders will basically find an earlier price action entry. It is better to enter the market by reversing K, or the strong boundary movement in the trading range market, and usually enter the market earlier than the breakthrough. Strictly speaking, the entry of any of our structures is usually a breakthrough entry, because breaking through the high point or low point of the previous K line is considered a breakthrough, because a single K line represents a price collection within a certain time range.
So why are typical breakout entries more effective at certain times?
Traders with a little bit of knowledge will realize that when the trend is strong, you can enter the market at any time. If the stop loss is relatively loose, you can basically get a certain amount of profit.
Especially in the trending market, every reverse breakthrough is the entry point for traders who follow the trend. For example, in a round of trending market, some traders will not enter the market immediately. They are waiting, such as waiting for a retracement K (because the retracement Withdrawing K is a retracement trend at a low level) homeopathic traders will enter the market when the retracement K is formed, because they think that in a trending market, breakthroughs usually fail (this is why I think breakthrough entry is not the best choose)
As shown in Figure 1, we can find that this typical breakthrough entry does not seem to be the best way to enter the market, but as long as it is in a trending market, as long as our stop loss is relatively loose, there will always be room for profit;
Most professional traders generally find a suitable entry point in advance, such as the reversal K in the dynamic resistance area during the retracement process. Directional breakthroughs usually fail, and they have reason to believe that they will continue to hit new highs or new lows. However, in the case of a strong trend, it is still profitable to break through and enter the market as long as the stop loss is relatively loose;
When the trend is so strong, active traders (in the case of bulls, usually institutions will set limit buy orders at the lows of the previous K-line) expect any reversal attempt to fail. Good entry, they will also enter the market at the breakthrough point, so as not to miss the opportunity of trend development, and ensure that they are in the market under the strong trend; the dynamic support or resistance area at this level is the large-level reversal K institution price limit entry site;
So how to ensure that you break through and enter the market without a large retracement?
Usually in the case of a strong trend, a breakthrough usually has a small retracement. Sometimes there is usually no retracement, and it is far away from the entry point. If the weaker usually breaks through, there will be a retracement. If it is strong, try not to wait and break through Entry is also a better entry. If it is weak, it is better to wait for a better entry position, such as entry at a high-level retracement K stop loss order, or a reverse K entry in the dynamic resistance zone of this level is better. Figure 2
As shown in Figure 3, there will be a retracement immediately after the breakthrough of 1 and 3. Although there may still be profits as long as the stop loss is loose, you can wait to find a reversal in the dynamic support area and continue to enter the market. After the breakthrough of 2 and 4, immediately stay away from the entry position. It shows that the probability of breakthrough continuation is high, and the possibility of breakthrough and entry without retracement is relatively large;
Summary: A breakthrough in the general trend market is not a very good opportunity to enter the market, but after judging the strong and weak trend, entering the market through a strong trend breakthrough will also avoid missing a round of opportunities. As long as the position is well controlled, a weak trend breakthrough may be in a relatively short period of time. In the case of a large stop loss, there is a greater chance of profit, but it may also be the extreme of volatility.
Add
