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Breakout Trades and High Volume Trade Spikes Video

By Bruce Banks

Breakout Trades and High Volume Trade Spikes

As individual traders, one of the key strategies we use is breakout trades. These are a key edge we can use because they allow small share traders to get in at the key pivot points in the market. We can use price action alalysis to find key levels of S&R in the market, and enter as they are broken.

On top of this, we watch the level 2 on a trade to see price ceilings/floors eaten up by orders before we choose to trade. This is a key advantage of taking a smaller size in the market. When we see a seller with 50k shares on the ask, we can time our entries as they are getting eaten up.

 

Why these levels?

When we are searching for breakout trades, we must identify key price action levels. These levels are agreements between buyers and sellers in the market. With each agreement of highs and lows, there are key levels outlined in the market. At each point in time the market turns, a level is formed. When these levels are re tested, they gain strength. This is assuming the re test was followed by a move away from the price point.

breakout trades trading
breakout trades from the daily chart

What about minor re tests of price action levels?

We need to clarify the difference between a re test, and a weakening of a key price action level. When a market comes down to re test a level in the market, two things can happen. One is where the market bounces off that level, re enforcing it. The other is when a trade tests that level multiple times on a lower time frame, weakening that level. With the latter, the price keeps re testing, each time weakening the level.

How can we use the difference between these two type of level testing?

When we see a key price action level being tested, we know it is prime for a breakout trade. These levels have been proven over time, and when broken will have an accumulation of traders willing to sell/buy.

The breakout trade moment:

When a key price action level is broken. Technical traders jump at the opportunity to make money. They see these levels in the sand drawn around areas where traders not only want to buy/sell, but want to exit their existing positions. This doubling effect is the key in breakout trades. You have an accumulation of both traders who are profitable, and traders who want to be profitable watching the same level. When that level is crossed. A volume spike appears. This is created by both stop orders, and new traders coming into the trade.

Multi Time Frame Trading: Top 5 mistakes Video

By Bruce Banks

Multi Time Frame Trading Mistakes:

When we start out multi time frame trading, it can be a bit overwhelming. You are trying to consolidate 2 or more time frames down into one actionable trade. Including a stop loss, entry signal, and risk parameters. In this video, we go over the top 5 mistakes that traders make when they are doing multi time frame confluence trading. These are the mistakes that can sink your account, actually make you MORE indecisive, and stop your trading altogether.

[Read more…] about Multi Time Frame Trading: Top 5 mistakes Video

OHLC Charts VS Candlestick Charts Video

By Bruce Banks

OHLC charts VS Candlestick Charts

These are two of the most popular ways of displaying data on our charts. They both display the high, open, low, and close of each bar. This means that the information that they display is identical, and it is purely stylistic choice between OHLC charts and Candlestick charts.

Are OHLC charts better than Candlestick charts?

OHLC charts display the information on the chart in a very simplistic manner. This means that, with the way we view them, they put near equal weight on the lows of each bar.

This can be good or bad depending on your own trading style. If you consider the wicks or the tails of the OHLC bars to be less important (a common method when trading candlesticks) reading the OHLC charts becomes more difficult. Without the emphasis of the difference between the open and close, OHLC charts tend to be less visual.

[Read more…] about OHLC Charts VS Candlestick Charts Video

Day Trading Risk Rule Maximum 2%: Video

By Bruce Banks

Day Trading With Maximum 1% to 2% Of Your Account Size

We have all heard of the day trading risk rule where we do not want to trade with more than 2% of our account size. That means that a 10,000 dollar day trading account can make individual trades of up to 100$ risk per trade.

Why is this day trading rule so prevalent among successful traders?

The one simple reason this strategy works for day traders is that we will all have losing trades and losing streaks. There will always be times, even if we do everything right, where we have multiple losing trades. Therefore this trading strategy works two fold.

  1. It prevents your account from being drawn down too quickly on successive losing trades
  2. Only losing 1% to 2% of your account size on a trade is less mentally taxing.
  3. It standardizes your trade sizes allowing you to improve on trade entry alone.

[Read more…] about Day Trading Risk Rule Maximum 2%: Video

Breakout Trades and High Volume Trade Spikes Video

By Bruce Banks

Why does the market break out of certain areas on the chart, and how can use these breakout trades? In this video, we analyze how to spot these levels of R&S and how to trade off of them.


High volume trade spikes happen when the market breaks levels of re enforced support and resistance. Active position stop loss levels trigger at this point causing a snowball effect.  When you are trading these levels, be mindful of how quickly the market can move. These levels do act as barriers for the market to break, but when they are broken the market can run quickly. This is because they hold not only people who want to trade that direction in the market, but the people with stop losses in place. This causes a two fold increase in buying/selling.

Why watch out for these Breakout Trades?

[Read more…] about Breakout Trades and High Volume Trade Spikes Video

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Recent Posts

  • Bullish Candlestick Pattern High Volume Trading Video
  • TAS Market Profile Trading Retracement Trades
  • Breakout Trades and High Volume Trade Spikes Video
  • Price Action Trading Video
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Bruce Banks Trader And Trainer

  • 1 Bruce Banks
    • Bullish Candlestick Pattern High Volume Trading Video
    • TAS Market Profile Trading Retracement Trades
    • Breakout Trades and High Volume Trade Spikes Video
    • Price Action Trading Video
    • Market Profile Point of Control: Video

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