OK, so this guy is a stock trader using daily charts, but the principles still apply.
Take a straight break if
- there is a consolidation before the break i.e. majority bear candles for a bullish break and visa-versa (same idea as my 3Min Bolli)
- if there is a gap above or below the break as this will trap traders (forcing them to liquidate positions at whatever price they can get in the direction of the breakout trade)
Wait for a retest if
- majority of the candles leading into the break are bull candles for a break long or bear candles for a break short – I see this an order vacuum but he explains it as ‘the selling (buying) has already happened’.
He is trading KLs but the first trade examples he shows is a triangle that gives a much better level.
