bricked up patterngood formation of the balls. time to follow the shaft to 150k. oh lord its gonna blow
BTCUSD trade ideas
Beware Bitcoin CRASH!!BTC has completed bearish shark and touched the upper line of megaphone, the target - 73300.
Bitcoin - This Month Will Decide Everything!Bitcoin ( CRYPTO:BTCUSD ) is still rather bullish:
Click chart above to see the detailed analysis👆🏻
In December of 2024, we saw a little pause during the overall bullish crypto bullrun, which was actually quite expected after the recent rally of about +500%. This could still turn into a false breakout, but since everything looks rather bullish, new all time highs are much more likely.
Levels to watch: $70.000, $300.000
Keep your long term vision,
Philip (BasicTrading)
PriceTime Concept in Fractal AnalysisI continue to receive numerous questions about recommended reading, which has left me no other option than pay my debt to the society by elaborating a little more on the unconventional analysis I frequently perform using Fibonacci Channels. Alongside with theoretical insights I'll provide my key inspirations.
The Misbehavior of Markets - Mechanics of Chaos
Benoit Mandelbrot, one of the most extraordinary minds of the 20th century, launched a full rebellion against traditional finance in his book, “The Misbehavior of Markets”. In it, he introduced his groundbreaking “10 Heresies”, a direct challenge to the core assumptions and principles underpinning mainstream financial theories. Mandelbrot’s insights expose how conventional models fail to account for the complexity, unpredictability, and turbulence that define real-world markets.
10 Heresies:
Markets Are Wild, Not Tame
Traditional View: Markets follow predictable, Gaussian-based models with mild fluctuations.
Mandelbrot’s View: Markets exhibit “wild randomness” with extreme, sudden changes that far exceed the predictions of Gaussian distributions.
Heresy: Risk management and pricing models underestimate the likelihood of extreme events.
Financial Variance Is Infinite
Traditional View: Variance (a measure of risk) is finite and calculable using standard tools.
Mandelbrot’s View: In fractal finance, price movements can have infinite variance due to heavy tails in the distribution of returns.
Heresy: Risk cannot be fully measured or predicted using current methods.
Markets Have Memory
Traditional View: Markets are “memoryless,” meaning past price movements do not influence future ones (random walk hypothesis).
Mandelbrot’s View: Markets exhibit long-term memory and dependence, where past trends and events affect current behavior.
Heresy: Independence of price changes is a myth.
Markets Are Multifractal
Traditional View: Price movements are linear and follow simple Brownian motion.
Mandelbrot’s View: Markets are multifractal, with different scaling behaviors across timeframes, and cannot be reduced to linear equations.
Heresy: Linear models cannot capture market complexity.
Time in Markets Is Variable
Traditional View: Time in markets flows at a constant rate, making it possible to analyze data at fixed intervals.
Mandelbrot’s View: Market time is irregular and subjective, accelerating during high activity (volatility clusters) and slowing during calm periods.
Heresy: Time is not constant in financial analysis.
Prices Do Not Follow Random Walks
Traditional View: Prices move randomly and independently, forming a normal distribution.
Mandelbrot’s View: Prices are influenced by patterns, memory, and clustering, resulting in heavy-tailed distributions.
Heresy: Random walk theory oversimplifies market dynamics.
Markets Are Non-Efficient
Traditional View: The Efficient Market Hypothesis (EMH) suggests that all available information is reflected in prices, leaving no room for inefficiencies.
Mandelbrot’s View: Markets are often irrational and exhibit inefficiencies driven by emotions, memory, and fractal structures.
Heresy: Perfect market efficiency is an illusion.
Risk Is Not Symmetrical
Traditional View: Risk is modeled symmetrically, assuming equal likelihood of positive and negative deviations.
Mandelbrot’s View: Downside risks are more extreme and frequent, leading to asymmetry in market behavior.
Heresy: Risk models that assume symmetry are dangerously flawed.
Models Need to Embrace Chaos
Traditional View: Financial models aim for order and predictability, relying on simplified assumptions.
Mandelbrot’s View: Markets are chaotic and unpredictable but exhibit fractal structures that can provide insights.
Heresy: Chaos should be embraced, not ignored, in modeling markets.
Forecasting Is Fundamentally Limited
Traditional View: With enough data and sophisticated models, market behavior can be forecasted with high accuracy.
Mandelbrot’s View: Forecasting is inherently uncertain due to the wild randomness and complex nature of markets.
Heresy: Precise prediction of market movements is a fool’s errand.
Mandelbrot's ideas answered why markets behave the way they do, rather than relying on surface-level analysis. It was definitely more convincing than any traditional TA material that had not much information on cause-effect mechanisms that reveal the deeper structural relationship within price movements.
Fortunately, long before becoming acquainted with Mandelbrot’s take on markets, I had already developed my own perspective, thanks to the experiments I conducted right here on TradingView years back. My work perfectly aligned with his vision that acknowledges complexity, extreme events, irregularities and the interconnectedness of historic data.
Concept of Relativity
I got another inspiration from reading a story about the most pivotal breakthroughs in Albert Einstein’s intellectual journey, leading directly to his formulation of the theory of relativity that later on forever changed the world. His thought experiment revealed the strange and counterintuitive nature of time when viewed from different frames of reference.
As Einstein imagined himself racing alongside a beam of light, he realized that from his perspective on the bus, as it was moving away from clocktower, the clock would appear frozen because the light carrying the image of the clock’s moving hands would no longer reach him. This insight, combined with his deep understanding of the constancy of the speed of light, led him to question the absolute nature of time and space.
The culmination of this “storm” in his mind was the realization that time is not universal; it is relative to the observer’s motion. This revolutionary idea, published in his 1905 paper on special relativity, fundamentally changed our understanding of the universe, introducing concepts like time dilation and the interdependence of time and space—a unified spacetime .
Einstein’s ability to visualize such extraordinary scenarios highlights the power of thought experiments in scientific discovery. It was not only the mathematics but also his imagination that allowed him to redefine our understanding of reality.
PriceTime Model via Fibonacci Channels
After being able to visualize and somehow digest the complexity behind mathematical model of relativity, I returned to Mandelbrot's book to read more about his stance on time itself.
"Price is a function of trading time, which in turn is a function of clock time" - B. Mandelbrot
I mean who am I to disagree with a professor... Moreover, it really begins to look like Price and Time are connected similarly to the concept of SpaceTime.
Given that the psychology of the masses is inherently sensitive to the golden ratio, I was inspired to create a unified graphical framework that interconnects price dynamics, enabling navigation through the complexities of ever-evolving financial markets. By directly measuring trend angles within significant cycles, I realized that the chart’s complexity could essentially simulate itself. I incorporate psychological levels (via Fibonacci ratios) into my analysis, acknowledging how emotions shape market behavior. By embedding these emotional drivers into fractal structures, I align with Mandelbrot’s understanding of the market as a blend of human psychology and mathematical order.
This led to the discovery that Fibonacci ratios influence not only the price axis but also the time axis, unveiling a deeper fractal harmony in market behavior. The way mass (or energy) curves the spacetime fabric to explain the behavior of objects in physics is strikingly similar to how historic price movements (a manifestation of energy) shape the pricetime fabric, revealing the fractal cyclicality inherent in financial markets.
My work builds on Mandelbrot’s groundbreaking theories by turning his insights into practical tools. By combining his principles of self-similarity, chaos, and complexity with innovations like Fibonacci-based fractal mapping and trend directionality, I offer a fresh perspective on market behavior. This approach personally helps me to navigate the complexity of financial markets, staying true to Mandelbrot’s legacy while pushing the boundaries of fractal analysis.
My motivation for staying on TradingView and analyzing charts transcended being money-driven. I could no longer see markets the same way. I broke free from the rat race and devoted my life to studying charts as a reflection of reality, aiming to uncover the intrinsic rhythm that truly drives price fluctuations.
That realization inspired me to prioritize structure-based prediction over blind forecasts driven by subjective narratives, which are often flawed at their core. Sadly, great minds like Benoit Mandelbrot are no longer with us, but it is our responsibility as TradingView users to carry forward their work, treating it as our own mission to honor their legacy.
The bottom line is that we should not confine ourselves to the literature of Technical or Fundamental Analysis alone. Instead, we must draw insights from any field, using diverse methods and approaches, to develop a robust probabilistic framework for anticipating future price movements.
Bitcoin (BTC/USD) Analysis Bitcoin (BTC/USD) price Analysis 4-hour time frame with key technical levels and patterns:
1. Resistance Zone: The green area near $110,837 indicates strong selling pressure, representing a significant hurdle for further upward movement.
2. Support Levels: Two critical support zones are marked:
Near $102,187, providing immediate buying interest.
At $98,686, acting as a stronger fallback level for potential price rebounds.
3. Trend: The chart suggests a bullish bias, with the price holding above the support zone and showing potential for upward momentum.
4. Price Targets (TP): Two take-profit levels are identified:
$104,500 as the initial target.
$107,500 as the secondary target, suggesting potential upside if the price clears the resistance.
5. Chart Pattern: A consolidation phase near the support zone, followed by attempts to break higher, indicates building bullish momentum.
This analysis suggests a cautiously optimistic outlook, with key support levels holding and potential for upward movement toward the defined targets.
NOTE This analysis is for informational purposes only and does not constitute financial advice,
Don't Forgot Like Button Share With Your Friends Trade Safe Thanks.
BTC sell!!Dont fall for this Bulltrap.
Something is about to happen to drag BTC down.
Its time to take a step back and wait for buy opportunities.
Distribution -> Re-distribution -> Accumulation
bitcoinhelloo, i think we are going to zero based on the sma6969, if you look closely you will see a huge negative bull penis divergence indicating a strong lack of buyers from 2pm UTC to 4pm UTC, based on my analysis this trend results in stocks and crypotos going to 0
Bitcoin - Weekly Forecast - Technical Analysis & Trading IdeasMidterm forecast:
73777.00 is a major support, while this level is not broken, the Midterm wave will be uptrend.
Technical analysis:
A trough is formed in daily chart at 88963.75 on 01/13/2025, so more gains to resistance(s) 102643.85, 108293.92, 110000.00 and more heights is expected.
Take Profits:
99607.07
102643.85
108293.92
110000.00
115000.00
118110.67
120000.00
125000.00
130000.00
134142.91
Total Profit: 5567500 point (55%)
Closed trade(s): 506200 point Profit
Open trade(s): 5061300 point Profit
Trade Setup:
We opened 11 BUY trades @ 94545.07 based on 'Hammer' entry method at 2025-01-13.
Closed Profit:
TP1 @ 99607.07 touched at 2025-01-15 with 506200 point Profit. (5%)
Open Profit:
Profit for one BUY trade is 99606.37(current price) - 94545.07(open price) = 506130 point (5%)
10 trade(s) still open, therefore total profit for open trade(s) is 506130 (5%) x 10 = 5061300 point (50%)
Lucky vs. Repeatability: A Key Insight for Smarter TradingTrading is a journey, one filled with highs, lows, and a constant drive to improve.
Recently, I came across an idea on Podcast that truly resonated with me: the concept of luck versus repeatability.
This distinction is critical—it’s the difference between chasing short-term gains that may never happen again and developing a strategy that can deliver consistent results over time. Let me explain.
The Role of Luck: Lessons from the 2017 ICO Boom
Think back to 2017, the golden age of initial coin offerings (ICOs). When a new crypto token launched, there was a rush to buy it, often driving the price up by 10x, 50x, or even 100x in a matter of days.
For many, this was a once-in-a-lifetime opportunity to turn small investments into life-changing wealth.
But what happened next?
That strategy no longer works today. The sheer number of tokens being created—thousands daily—means money is now spread too thin for any single token to experience those explosive gains. What worked in 2017 relied on luck, not on a repeatable edge in the market.
Luck is a fascinating aspect of trading. It can make you rich once, but without the skills to preserve and grow that wealth, it often fades away as quickly as it appeared.
Repeatability: Why Market Cycles Matter
Now let’s contrast this with something far more enduring: market cycles.
Markets have always oscillated between fear and greed.
During times of greed, prices often surge beyond their intrinsic value.
Conversely, fear can drive prices below their true value. These cycles aren’t random—they’re rooted in human psychology and have been evident for decades.
For example, during bull markets, optimism often pushes valuations to unsustainable levels. Then, a sudden shock—be it economic, political, or otherwise—triggers a wave of fear, and the cycle reverses.
This ebb and flow have happened in the past, and will likely continue into the future.
This is what makes market cycles repeatable. Unlike luck, which depends on being in the right place at the right time, repeatability allows you to build a foundation for sustainable success.
Compounding: The Key to Long-Term Growth
Once you adopt a repeatable trading strategy, you unlock the power of compounding. Even with a modest starting capital, consistent returns can lead to significant growth over time. The beauty of compounding lies in its exponential nature—small gains, when reinvested, can snowball into substantial wealth.
This doesn’t happen overnight, but that’s the point. Repeatable strategies thrive on patience and discipline, allowing you to grow your account steadily and responsibly.
A Common Mistake in Pullback Trading
Let’s take a practical example: pullback trading.
Many traders focus on waiting for the price to re-test a key level, like previous resistance that could turn into support. While this approach makes sense in theory, the market doesn’t always play by the rules. Prices often fail to re-test those levels, continuing their move without offering the ideal entry point.
The solution? Plan for multiple scenarios. Understand that pullbacks can vary in depth and structure, and be prepared to adapt. Flexibility is key when applying any repeatable strategy.
A Thought to Keep in Mind
One of the most liberating truths about trading is this: the market doesn’t care about you. It doesn’t know your goals, your dreams, or your trades. Losses aren’t personal—they’re just part of the game.
The real question is how you respond to them. Each loss is an opportunity to reflect, learn, and refine your approach. Over time, this process turns a good strategy into a great one.
Final Thoughts
As traders, we’re constantly faced with choices. Should we chase the next big thing, hoping for a stroke of luck? Or should we focus on developing strategies grounded in repeatable principles?
For me, the answer is clear. While luck may occasionally play a role, it’s the repeatable strategies—those built on solid foundations—that lead to lasting success.
The next time you evaluate a trading approach, ask yourself: Is this lucky, or is it repeatable? The answer might just reshape the way you trade.
"Climbing the Grid: BTC Edition" In this chart, the trendlines are drawn to represent key areas of support and resistance based on price action over time. Here’s how to explain them in simple terms:
1. **Green Trendlines (Support)**:
- These lines are drawn underneath the candlesticks. They show areas where the price found support and moved higher after touching or approaching the line.
- The lower green horizontal line at **89,061.47** represents a strong historical support level, meaning the price previously stopped falling and reversed upward from this area.
2. **Red Trendlines (Resistance)**:
- These lines are drawn above the candlesticks. They represent levels where the price struggled to go higher and reversed downward.
- The upward-sloping red trendline represents a resistance trend where the price is being pushed lower whenever it approaches the line.
3. **Blue Trendline (Broader Trend)**:
- This trendline connects major swing lows over a longer timeframe, showing the general upward momentum of the market.
- It's more of a macro-level line, indicating the long-term bullish direction.
4. **White Trendlines (Neutral or Structural)**:
- These lines form part of the structure, connecting minor pivot points or angles within the trend.
- They give additional context but may not hold as strong as the green and red lines.
5. **Breakout Point (Highlighted with an Arrow)**:
- The red arrow points to an area where the price attempted to break through a resistance level and succeeded, confirming a breakout.
- After breaking past, the price is now approaching **105,346.97**, which could act as a new resistance or continuation level.
In essence:
- **Support lines**: Where the price bounces up.
- **Resistance lines**: Where the price gets rejected.
- The interactions between these lines help predict where the price might go next.
- Bull Flag scenario is likely to unfold
It's disappointing !!!Once again, The price action could drop to $95K and then return to its peak. It will take some time to recover from the damage that these sh*t meme coins have done to the crypto market.
Give me some energy !!
✨We spend hours finding potential opportunities and writing useful ideas, we would be happy if you support us.
Best regards CobraVanguard.💚
_ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
✅Thank you, and for more ideas, hit ❤️Like❤️ and 🌟Follow🌟!
⚠️Things can change...
The markets are always changing and even with all these signals, the market changes tend to be strong and fast!!
BITCOIN (BTCUSD): Will We Test ATH Soon? Following a strong upward trend in Bitcoin this week, the price reached the resistance line of a rising parallel channel and began to retrace.
I see a classic support cluster forming within a horizontal range and the support line of the channel on a 4-hour timeframe.
Currently, the market is testing this zone.
I predict that there will be a bullish rebound leading to further upward movement, possibly reaching 106,000 and potentially even testing the all-time high.
Conversely, if the price managed to break and close below the confluence zone, that would be a strong bearish signal.
BTCUSD-3 Peaks and a Domed HouseTops are never easy to call. The Bitcoin cycle top won't be the same as the previous one. It appears that the cycle tops so far are:
The gods are rotating all the classic patterns
- 2017 Cycle Top: Classic Blow Off Top.
- 2021 Cycle Top: Double Top.
We posit that the current Bitcoin macro cycle will end early and December 17th, 2024 at 108K was Bitcoin's Cycle Top.
The topping pattern this cycle will be 3 Peaks and a Domed House
Reasons
- It's Bitcoin. An 80 vol asset. It can do anything which is actually a feature.
- Did you really think Trump cared about Bitcoin? Thanks for your votes, and he gave you 100K. You're welcome.
- No Bitcoin Strategic Reserve. Imagine thinking it will be passed by Congress.
- MSTR DCA price is a target at 62K is a taret.
- Bitcoin ETF buyers think it will be UP ONLY for them? They need to experience a large bear market shakeout and start calling Bitcoin a Ponzi scheme to truely earned their stripes.
Altcoin Season 2025The 2025 alt season promises to be one of the most significant events in the history of the cryptocurrency market.
This is because I expect the end of this cycle at the end of this year. Euphoria is needed at the End of the Cycle.
Investors should carefully analyze project fundamentals, avoid excessive risk during the euphoria stage and consider long-term trends. The key to success will be portfolio diversification and timely profit-taking. A careful study of the phases of the alt-season and trends will help to maximize its opportunities.
This is what I will talk about in this post.
Phases of the alt season
An analysis of past alt-seasons shows that they consist of several key phases:
1. Accumulation: This phase begins after a prolonged bear market when prices stabilize at low levels. Investors and funds gradually accumulate promising altcoins, focusing on projects with strong fundamentals. Volatility at this stage is minimal, and trading volumes are low, which creates ideal conditions for forming a base before future growth.
2. Initial momentum: In this phase, the altcoin market shows signs of revitalization. The catalyst can be positive news, a technological breakthrough, or a macroeconomic factor such as the rise of Bitcoin. Trading volumes increased, and the first altcoins began to outperform bitcoin in growth. These are usually large projects such as Ethereum or Binance Coin.
3- Euphoria: The most dynamic and volatile phase. During this phase, mass attention shifts to altcoins. Trading volumes reach peak levels, and the prices of some tokens grow tenfold in a short period. Investors rush into high-risk projects, including new and little-known altcoins. Hype, such as DeFi, NFT, or metavolutions, have started to play an important role. However, this phase is accompanied by a high level of speculation, often leading to market overheating.
4. Culmination: In this phase, a slowdown occurs. The market becomes overheated,and many investors lock in profits, causing the first significant corrections. Low-capitalization altcoins begin to lose popularity,and liquidity is reallocated to more stable assets.
5. Correction: The final phase is when the market returns to realistic levels. Prices of most altcoins fall sharply and trading volumes decline. Investors who entered the late stages of euphoria recorded losses. However, real-value projects are identified at this stage, maintaining their positions and preparing for the next cycle.
Sectors and trends for the 2025 alt season
The 2025 alt-season is expected to be centered around the following sectors:
1. Decentralized Finance (DeFi): Projects related to financial services automation will continue to lead the way. Interest in protocols with unique yield and security mechanisms is expected to grow. Especially related to stablecoins
2 Real Asset Tokenization: The trend of linking cryptocurrencies to real assets such as real estate or precious metals will intensify. This trend will attract institutional investors. They are already in, but new players will come in to give the industry a boost
3. Artificial Intelligence and Blockchain: The integration of AI into blockchain will open new perspectives for automation, data analysis and improving user experience. Just like AI agents are doing now
5. Metaviews and GemiFi: The development of metaviews will continue to attract millions of users. Gaming will move to the next level, offering enhanced functionality such as smart contracts and game integration. But for a large number of players and a large number of transactions, a suitable blockchain is needed.
Conclusion
I didn't specifically talk about any projects because each project is unique with its own community, structure, etc.
With this post I wanted to give you an understanding to continue your analysis and determine what phase and niche your token is in.
If you want to shill your altcoin, do it in the comments.
Best regards EXCAVO
BITCOIN This is what followed Trump's previous inaugurationBitcoin / BTCUSD appears to be repeating almost the exact same pattern of Trump's 2016 election win.
The chart on the right shows that a Bull Flag set the stage for the Nov 8th 2016 elections, after which the price rallied near the 2.0 Fib extension and consolidated until Trump's Jan 20th 2017 inauguration.
What followed after that was an immediate rally a little over the 3.0 Fibonacci.
With the 2024-2025 pattern being almost identical so far, we can expect a similar rally to the 3.0 Fib, which is a little over $150k.
Previous chart:
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BTC/USD Analysis strong bearish forecast CRYPTO:BTCUSD 🔻 Double Top Pattern Formed 🔻
The chart has shown a clear Double Top Pattern, signaling a potential bearish move.
🧐 Entry Level : $102,500
💡 Technical Target Levels :
$100,500
$97,000
📉 Stay alert for the big red candle!
📲 Follow, like, and comment to stay updated on this trade! Let’s make those profits together! 💰
BTCUSD BEARISH NOW( READ CAPTION)BTCUSD Next possible area is Dropping in the chart further you can view my chart and share your ideas about it .
Bitcoin is completely following the trends in Sell zone so according to my personal analysis BTCUSD will Sell.
KEY POINTS :
Cerrent price: 105000📊
Target point 1 :100000📊
Target point 2:95000📊
SL: 110000❌
Support with your likes and comments , Follow me for more Technical analysis & Signals .
BTCUSD: Can Retest Lower Areas Disclaimer: This analysis is my personal opinion. It is not a trading advice.
Greetings Mates, express your analysis on BTCUSD in the comment section.
Current Bitcoin Price: 105800
I think Bitcoin from 105800 position can drop to test lower positions as it has lost its bullish movement for a while. First it will test the area of 104000 and after breaking this area Bitcoin will reach 102000.
Support Zone: 104000, 102000
Resistance: 105800, 108000
Like, comment and support.
Thanks for your precious time and support
"A familiar setup playing out in real time." Oh, this setup is textbook, and it’s got that “fool-me-once” vibe written all over it. See that blue circle? That’s a classic squeeze on the correlation—pressure cooking under the surface, waiting to blow. And when it pops, price has no choice but to follow, just like those yellow moves laid out perfectly before. It’s a familiar tune with a fresh beat, and I’m all in for the ride.
Now, everyone’s shouting bearish, headlines are screaming “doom and gloom,” but you know what? That’s fake news. This dip? It’s bait—a straight-up bear trap. And while everyone else is sweating, I’m grinning. Why? Because the VWAP is whispering the truth—a clean golden cross brewing right in front of us. You don’t ignore a setup like this. You ride it.
Here’s the kicker: this isn’t some random coincidence. That squeeze and KC tightening? It’s a familiar setup in high definition. — a repeating pattern that’s ready to do what it always does. The market’s playing checkers, but this setup is straight-up chess. I see the trap, I see the squeeze, and I know exactly how this game ends—bulls breaking free and price ripping higher.
Bitcoin simple trading idea!Hey Noobs! Simple idea if bitcoin holds the trend line on the hour time frame we go long, take profit at ATH 109K-110K I am going to bed lets see tomorrow morning if we enter this position!
#btcusd #BTC #elliottwave short sell setup wave 4 24Jan25This count is based on my assumptions so anything can happen not a trading or financial advice just for educational purposes only kindly do your own ta thanks trade with care good luck.
How to Avoid Falsa Breakouts and Breakdowns?Avoiding False Breakouts and False Breakdowns: A Guide for Traders
Have you ever seen a significant resistance level break and then opened a long trade, only for the market to make a sharp move to the downside? Or perhaps you've entered a short position after the price broke support, only to watch the market rebound?
If so, you're not alone. Many traders have fallen victim to false breakouts, so don't feel bad. Recognizing these situations can be challenging, but it's crucial to learn how to identify them.
In this article, we'll discuss false breakouts and breakdowns, and share two powerful strategies from the CRYPTOMOJO_TA team that can help you stay on the right side of the market and avoid unnecessary losses.
Understanding False Breakouts
The solution to avoiding false breakouts is quite simple: wait for the candle to close before acting on a breakout. Jumping into a trade as soon as the price breaks a key level can often lead to failure. Therefore, avoid placing entry orders above or below support and resistance levels to automatically enter a breakout. These orders can result in getting "wicked" into trades that never materialize.
The only way to successfully trade breakouts is to monitor the market closely and be prepared to act as soon as the candle closes in the breakout zone. Only then can you determine the breakout's strength.
How to Avoid a False Breakout
It can be almost impossible to tell a true breakout from a false one if you're not careful. Here are four ways to avoid falling for a failed breakout:
1. Take It Slow
One of the simplest yet most challenging ways to avoid a false breakout is simply to wait. Instead of rushing to enter a trade when the price breaks through support or resistance, take a step back. Depending on your trading style, give the market a few days to reveal whether the breakout is genuine. Often, the false breakouts will become apparent after some time.
2. Watch Your Candles
A more advanced version of waiting is to use candlestick charts to confirm the breakout. Wait until the candle closes to assess the strength of the breakout. The stronger the breakout appears, the more likely it is genuine.
Many traders lack the time to monitor their charts constantly, but with us, you can set alerts to notify you when specific market conditions are met. For a breakout, create an alert based on the candle's close price to ensure you're only entering after a true breakout.
3. Use Multiple Timeframe Analysis
Multiple timeframe analysis is an efficient way to identify potential breakouts and distinguish between genuine and false ones. Watch your chosen market across various timeframes. For instance, you might spot a potential breakout in the short term and then "zoom out" to analyze the market over a longer period, like a week or a month.
This broader perspective helps identify whether a breakout is significant in the long term or merely a short-term movement that may soon reverse.
4. Know the Usual Suspects
Some chart patterns can indicate the likelihood of a false breakout. These include ascending triangles, the head and shoulders pattern, and flag formations. Familiarizing yourself with these patterns can help you identify when a breakout is more likely to fail.
For example, ascending triangles often indicate a temporary market correction rather than a true breakout.
How to Trade a False Breakout
If you're a trader, you can use a false breakout as an opportunity to go short. Predict that the market will drop after the failed breakout and profit from the decline. Alternatively, you could hedge by opening both a long and a short position—going long in case the breakout is true, and short if it fails.
To trade a false breakout, follow these steps:
Create a live CFD trading account.
Perform technical analysis to identify potential false breakouts.
Manage your risk by using stop orders and limit orders.
Open and monitor your first trade.
How to Trade Breakouts
If you prefer to trade actual breakouts, here's how you can do it:
Create a live account or practice with a demo account.
Learn the signs of a potential breakout. You can find in-depth resources about breakouts on IG Academy to upskill yourself.
Open your first position.
Plan your exit strategy carefully, including setting stop orders and limit orders.
Take steps to manage your risk.
False Breakouts Summed Up
A false breakout occurs when the price moves beyond the normal support or resistance levels but fails to sustain the momentum, leading to a reversal. Traders may mistakenly go long during these events, only to see the price lose momentum shortly after.
You can avoid false breakouts or trade them intentionally by studying the market, learning chart patterns, analyzing timeframes, and using the right tools. With us, you can trade both breakouts and false breakouts using CFDs.
This chart is for informational purposes only.
Never Stop Learning
I would love to hear your thoughts, charts, and views in the comment section. Keep learning, stay patient, and keep improving your trading skills!
Thank you!
Dear Bitcoin, is't about time...For over a month, Bitcoin's price action has been rather frustrating, as it has remained stuck in a range. The key support level is clearly at 90k, while resistance is around 108k.
Recently, the price tested the resistance level again and has since entered another consolidation phase.
On the positive side, this consolidation appears to be a buildup, potentially signaling an imminent breakout above 110k.
As long as the price holds above 100k, we can reasonably expect this breakout to happen sooner rather than later.
As I’ve mentioned before, the target level for this move is around 130k.
