分类:BO

Breakout，突破. Breakout means close beyond support or resistance, like high or low of prior bar or bars, or EMA. Bulls want big bull bar closing on its high and far above resistance. Bears want big bear bar closing on its low and far below support. Generally, we can look at breakout from 3 perspectives: Trend, Trading range, and Reversal. See also fBO.

Breakout in trend

coming soon...

Breakout in trading range

Successfully identifying breakout in trading range is probably the hardest of all, Ninetrans' article Price Action Basics IV: Trading ranges, Trends, fBOs and BPs studied this case very well, I am rewording them a bit here with some of my add-on comments to make it easier to read, but credits goes to Cad.

A breakout from a trading range is an attempt to create a trend and its failure is a move back into the trading range. A successful breakout leads to a trend. Similarly, a successful failure to resume the trend leads to a trading range. Today, b15 and b28 were failures to resume the trend and b67 was a successful resumption of the trend.

Price Action Basics IV: Trading ranges, Trends, fBOs and BPs

After every breakout, the trader needs to decide if he will fade the breakout or enter with the breakout on a pullback. In general, when in a trading range, a trade on the failure of the breakout is more likely to succeed and certain important signs are needed to trade with the breakout. The signs of successful breakout of a trading range are:

1. Breakout is strong (i.e., half or more of the breakout bar is beyond the break point, like 67 here.)
2. Strong close
3. Second attempt to breakout
4. Poor attempt to fail the breakout

Lets look at these one by one:

1. Strong breakout bar: b27 and b67 were both very strong breakout bars both with strong close, but b67 was more than halfway above the break point. Even though b27 was less than halfway out, there was a good chance that a 2 or 3 legged pullback could give a second attempt up, because it is a very strong bull trend bar. A strong close beyond the breakout point indicates that there were insufficient fade orders at the break point. A weak close such as b10 indicates fade orders were waiting and a failed second attempt (b15) is likely to seek the other end of the range. On the other hand, b10 was a weak breakout bar with weak close.
2. Second attempt: Second attempts are stronger than first attempts and second attempts of strong closes usually are very successful. An fBO (b28) that fails to take out the other end of the range (b15 low) should be treated like a deep pullback and is a possible trend break (HL after HH). This is especially true after a fL2 such as the one at b50.
3. Poor attempt to fail the breakout: for e.g. b68 and b69 are poor attempt to fail the b67 breakout, on the other hand, b11 and b15 are strong attempts to fail the breakout. Usually, when the first failure of breakout is pronounced (b11,12), the second will usually go much further (b15-b27)^[1]. If the bar after the failed breakout bar is a reversal or inside bar with a strong close such as b28, there is a high probability of at least 2 legs down, possibly deep. If the attempt to fail the breakout is poor such as b68/69, and it does not trigger, the chances are very high that the price will seek a measured move of the prior range (b28-45 met at b79).

Breakout in reversal

Usually some kind of vacuum effect.