Monday, October 20, 2008

Classic chart pattern my way

How many of you guys traded classic chart pattern, yes every trader traded classic chart pattern, .but how many of us are consistently making money trading classic pattern, not many. So what’s the problem? Classic chart patterns are breakout trading, not all the breakouts are successful; some fake out .yes this is the problem trading classic pattern. How to know which will end up a false breakout, I don’t think there is any crystal ball to see the fate of a breakout. But I suggest few points that might help you guys to increase the probability of a breakout.

1).There must be momentum in the price action
2).Volume must be high in the breakout
3).Follow the big trend
4).Avoid choppy market

I also trade breakout but I don’t follow the text book method, I believe that you have to be a step ahead of other traders to be able to make money in trading. That’s why I always look for a better entry point before other traders will enter that trade. This method helps me to minimize my risk and maximise my profit.

1 comment: