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.