Hey hey, what's up my friend. So have a look at this chart over here. Let me ask you when you see this: Black Arrow Here will you want to short this Market At this price point, will you want to shot it? Look at how the price breaks below. Support: Look at the strong bearish momentum of this candle. Will you want to shot this Market Yes or no. If you reply yes, then here's what happens next. The market rarely up higher and then you would have gotten stopped out of your trade. Now some of you might be thinking man, right now the market is Rick I knew it. But let's hold that thought for a while. What if I tell you that there is a way to actually avoid such unnecessary losses in the market? What if I tell you that there's a way to actually profit from such a phenomenon from such a pattern in the markets. Would you want to learn more right? And the answer is yes, it can be done. It's actually called The False break trading strategy. And the best part is this is you can actually use this trading strategy to trade the stock markets, the Forex markets or even the crypto market. So let's get to it. Now the first part of the trading strategy is this: We want to be trading in the direction of the trend. So look for markets to be in an uptrend. Okay, why? Because as you know when the market is trending, it is slightly to continue in the direction of the trend. So this will pretty much you know improve your winning rate. Put the odds on your side. Number two: Wait for the market to make a pullback and re-test support. Why is that? So here's the thing right. Just because the market is trending doesn't mean it's going to go up in one straight line. Because if you have seen the charts enough, you know the market goes up, Makes a pullback, goes up, makes a pullback, goes up, makes a pullback. So we're waiting for it to make a pullback and retest support right. Re-test Support This way we have a logical place to set our stop loss. We are trading from an area of value and again, that further put the odds in our favor. Number Three: This is important. Pay attention. The price breaks below support and quickly closes back above it. What is significant about it, the price breaks below support and quickly closes back above it. So as you know, right when the price retest support like this. Okay, let's say retest support. Sometimes the price breaks below support and then boom goes down into a downtrend. So we don't want to just blindly buy support because the support could break. and then the market you know continues down lower. So what we're going to do is to let the market test the water for us. First, let the market break below support and Watch What Happens Next, because if the price breaks below support and continues down lower, then you don't want to be buying. We want to stay on the sidelines and avoid. you know, getting caught on the wrong side of the move. But if the price breaks below support and then you quickly reverse back up into support, this tells you that there are buyers stepping in about to push the price higher. So this means right. You know that the market is likely to continue higher. So for example, here's what we'll be looking for: Market Over here goes up, comes down, goes up, comes down retail support. It breaks below support and then quickly reverse and close backup above support. So At that point at this point in time right, the market tried to break below this lows tells you that hey, there's no selling pressure. That's why the price didn't go down low. Instead what happens is the buyers stepped in right and pushed the price up higher. That's why you have the market you know, closing back above support. So this is where you are looking to time your entry to go long. So when that happens, you can pretty much you know go along on the next candle open but already later on. I'll share with you some Advanced technique right to to tell you how you can actually you know, reduce your risk and maximize your profits in the later section. And finally we have our stop loss right to set a distance below the lows. Okay, sorry about that, That's a horrible uh line drawn across the screen below the lows right and Target Profit just before the nearest swing high. So why we want to set our stop loss a distance below the lows is because we do want to get stopped out of our trades prematurely. How many? How many times have you know set your stop loss below support and then the market you know reaches for your stop loss and then pop goes up higher right? So that's why we couldn't set our stop loss at the distance below support. And as for Target, we'll set it just before the nearest swing High to give us a chance right of exiting a trade with profit. So now let me walk you through some examples so you can see this in action. As you can see, this is a chart called Lentils Holdings This is the daily time frame for this particular market. so the market right now is in an uptrend Market making a series of higher highs and higher lows right? Higher highs, higher highs higher highs higher highs and higher Low Higher Low higher low. So what you need to do now is to wait for the market to make a pullback and retail support. So ask yourself, where is support on this chart over here? So from what I'm saying, this is an area of Support over here. Okay, I'll just put this black color so you know we are referring it to Support. So let's see what happens. So the market hits down lower retail. Support: Great! Remember we don't want the price to just retest support. We want the price to take out the loads of support right and then quickly close back above it signaling that there is a lack of selling pressure and buyers are stepping in to push the price higher. So this is now the price. Has you know broke below Support Many Traders will make a mistake man. right now this is a downtrend. A bear Market shot this Market itself. and then what happens next is that if you are familiar by now this is what we when the price reverse up higher is what we call a false break where the price suddenly makes a reversal reversal and close back into support. So when you see this you can look to enter on the next candle open. Okay so I'm gonna place an entry let's say the candle open at this price over here. So I'll delete this one over here since you know it's an area of support and this one over here is the opening price. we'll change this to Green as our entry so known as the entry point. Now what about stop loss? So remember we want to set our stop loss usually a distance below the low. so this is the low. We don't want to just set our stop loss just smack below this low because the market could come down lower, hit your stop loss and reverse up higher. How many times has that happened to you? If that has happened to you, type in me in the comment section below. Yeah. So what we want to do is instead is to set our stop loss a distance below this low. So there are two ways you can do it. Number one most: Traders can just eyeball the chat. Okay, right now this is the low. Let me set my stop loss somewhere about here. That is fine, that is. you know, doable. But if you want to be more objective, what you can do is you can use the average true Range indicator and give you an objective measure to set your stop loss. So how to do is I'll just show you look for the ATR indicator every two range. I Usually like to go with the 20 period ATR I'll use SME right 20 period because there's 20 trading days in a month. They click OK and what you see is that right now the ATR value is 80 0.82 Okay, 0.82 So what this tells you is that over the last 20 trading days, the historical volatility of the market or rather, the market has moved an average of about 82 cents per day right over the last 20 days. So what you want to do is very simple: identify what is the low of this particular candle over here. the low, the extreme low of support So if I look at it right, the extreme low of support. The value is about from what I'm saying 19.63 So I'll take 19.63 right? The low over here is 19.63 and I'm minus 1 ATR the value. So you know one ATR value is 82 cents. All right, minus 0.82 So my math is not good. so I'm going to take a trusty calculator and find out what is the answer. and in this case, it gives me an answer of 18.81 18.81 Okay, so this is where my stop loss is going to be. So I'm going to set my stop loss at 18.81 Let's put this to rate to signify our stop loss: 18.81 Okay, now what about Target So remember we said that we can set our Target just before the nearest swing High Why in the nearest swing? High Because you know this is where potential selling pressure could come in right and you know, push the price lower. So price comes out into swing. High Maybe this could be a resistance? who knows right and the price could reverse down lower from it. So we want to respect this price structure and this is where we set our Target to give us a higher chance of exiting a trade with profit. Of course there are other ways to you know set your target to maximize your profits I'll share with you that later. But for now, the basic stuff will set our Target just before this nearest swing. High Let's set this to grow up Blue. All right. Okay so in this case where you can see that our entry is this green level over here, our stop loss is red one over here and our Target is this level over here. So for those of you who like to you know identify how much is your risk to reward on this trade, you can use this tool over here I Believe it's called the this one over here. No, no, not this. Look for long position since you're looking too long. just draw it from this green. The green line matches this level here and the red one shifted to here. Okay, and your target? You can shift it to this blue line that you've highlighted earlier. So you can see for this particular trade your risk to reward right? It's about 1 to 2.08 over here. so this means they are risking a dollar to potentially make two dollars and eight Cent on this trade. Yeah, so let's see what happens to this particular trade. Okay, so in this case the market heads up higher and then boom right. You can see I'm just gonna remove this tool for now. You can see that it has actually hit our stop loss over here. This one is actually No. I Mean it didn't hit your stop loss. It has actually taken out the lows over here. All right. So if people who put their stop loss just below this lows would have gotten stopped out of the trade and then what happened is that the market Gap up higher and then getting your target eventually. So hopefully by now you can see that you know the importance of setting your stops a distance away from this lows because you don't want this to happen to your trade right where the market just hit down lower, hit your stop loss and then bounce back up higher. You know, eventually hitting your target, but you already stopped out of the trade. Yeah, so hopefully you can see how this works next. Let's have a look at the dollar against the Japanese Yen right? so you can see that again. This Market is in an uptrend, so we're waiting for it to make a pullback towards an area of value like support. So I'm going to draw support highlighted over here. Okay, I'm going to change this to Black to signify an area of support. So what's left to do is wait for the price to retest support, not just retest support to also take up the loads of support that you see over here. So let's see what happens. So in this case, the market retest support of breaking below this lows and then quickly reverse back up above support right? So this is what we call a false break. So imagine this. Imagine traders who are shorting the breakdown of this loads as the price you know breaks below this lows. They're shorting as the price hit down lower and the next thing you know, the market. quickly reverse back up higher, closing back above support. What does this tells you? This tells you that hey, Market tried to head down lower, but there's no selling pressure coming. There's no sellers coming to push the price lower. Instead, what you have is there by stepping in pushing the price up higher back above support, right? So this is where you want to look to go along on the next candle open. So okay, Next candle open at this price point. Let's draw this over here, right? So let's just let's say it's our opening. Uh, entry point, right? Let's put this to Green I'm just going to remove this black line just to make it less cluttered. Now what about stop loss, right? So earlier, you've learned the technique to set your stop-loss one ATR below the extreme low of support so you notice the extreme low of support. I'm not going to calculate the one ATR for you since you didn't know how to do it, but by rough estimate based on eyeballing I'm guess it's going to be some way about here. This way your stop loss is going to be okay. Now what about Target right? So you know this is your recent swing high. This is where you can look to set your target and you set it to Blue. You can see they always mess up with the clicking and the lines always disappear here. So anyway, this is the potential false break trading setup right? and I have an advanced tip for you which is right if you look at this: Market notice that when the market is in an uptrend, it tends to break the prior high. So for example, over here this is the prior highs. The market breaks above. It makes a pullback market, then breaks above this prior High goes up higher, pulls back, then breaks above this prior high. Right now, it's hitting up higher, makes a pullback, and then imagine this: if the market breaks up higher, it's probably going to break up above this prior high. So if you set your target right just before this highs, it is not wrong. But you realize that you're kind of like leaving something on a table because the market tends to exceed the highs by a little bit more before it makes a pullback. So how can you kind of like quantify where would the price exceed a little bit more right before it makes a pullback? So this way you can use the tool called a Fibonacci extension to help you with it. So here's what. Uh, you can consider doing so. Number one, Let's say you enter. Let's say, one standard lot of dollar against the Japanese Yen you go long, you can maybe put 0.5 Lord over here. Foreign to sell at this highs over here. Let's call this target one right. TP one take profit one. This is the first level that you take profit. So so let's see what happens right? So in this case the market. uh by the way, this is a cherry pick chart. It's going to hit my first Target for sure. Okay so in this case, uh you can see over here the market starts to hit higher and eventually hit our Target over here. So now where can we set our Target to to kind of like get the most bang for your buck right for this particular trade. So this way you can use the Fibonacci extension. Okay over here choose this trend based flip extension the way you want to draw it right since your longest Droid from the lows to the highs and then back to this lows again right the exact lows. Okay and then you have a few numbers popping up right? So I'm just going to show you what the few numbers are. So I'm just gonna show you over here so you can see over here you have number one is the one 27 extension. over here they have the 1618 and then two. so there are three levels that you can choose from. Then of course if you are more conservative I recommend you know taking profits at the 127 extension. So you have a higher chance right of exiting this trade with a profit especially for the second bus second half of the position that you have the remaining 0.5 lot. So let's say we set our second uh Target at this 127 extension just somewhere slightly below this level. So I'm going to shift my this target for the second position to just below this level and see what happens next. Okay so in this case you can see that the market did eventually hit our second target as well in this case even hitting the 161 in extension. So again I like kind of let you decide which which uh, which uh extension you want to use, what is it the 127s extension, the 1618 or the 2.0 And one tip that I have to share with you is that you can actually reference past the price action of the markets and see which one has a higher chance of being hit. So for example let's say you have in this case you are not sure. use the 127 extension or the 1618. you can look back at past price action and see which one the market has hit. So for example, if I look back all right you can see over here. Let's say this was the previous uh swing High swing low to swing high I can draw it as well from this low to this high and then back down again and you can see that previously it has hit about uh, at least 1618 and eventually hitting two as well. So if you know that the previous price section has a good chance of hitting the 161 it or maybe even a two then this is where you can be a little bit more aggressive in the sense maybe I will you know be a little bit more greedy and have my target maybe just before the 16th, Want it? But if you look at historically the price usually doesn't exit or the 127 extension before it, reverse down lower Then of course you are you going to be more conservative and not set your target too far away, especially for the second position. Next, let's have a look at Bitcoin right? So you can see that it can also be applied right to the cryptocurrency markets. And for this example, let's look at a short trade. So again, what is the market structure that you're seeing over here? So this is clearly no longer an uptrend? It's actually a downtrend. So same principle apply. Market is in a downtrend there. We are looking for the price to make a pullback towards resistance. No longer support right, but resistance. Okay, so in this case, where is resistant. So I can actually draw one over here I Think somewhere. But here is the resistance. Okay, so I'll just change this. Change this to Black You know that it's resistance. So what we're looking for is for a false break at resistance. So wait for the price. do you know break above resistance and then it strongly close back below it. So let's see what happens. Okay so you can see over here in this case Market has not you know reversed below it. Over here you have this what we call a shooting star pattern. Okay so for those of you familiar with candlestick patterns, this is what we call a shooting star pattern. Now let's assume right that you missed this trade. You didn't manage to shot this trade on the next candle open. So let's see let's say for example, the market is hit down lower over here and you kind of realize that the market has really you know, hit down quite a bit and you're kind of late to the move. So what can you do? Okay so one Advanced tip that I have for you is that you can consider using a sell limit order. So let's say for example, you don't want to chase the market when the price has already come to this low. So what you can do is to use a cell limit order and set it at a level right had you not originally missed the trade. So let's say for example, if you didn't miss the trade right, where would you have placed your order, your order would have been at this level over here isn't it? So what you can do is to actually now place your order a cell limit order at its original level as though right, You didn't miss the trade at the start. Okay, so I'll just change this to grid. Okay, so I'll just remove this black line. Okay, so this green light actually let's not confuse it. Let's change this green line to let's say uh, this. Orange Line Okay, let's say this is a cell limit. Order this orange line so we want to have the market. Let's see if we can mix a pullback towards this orange line and then give us an entry right at the original price point had we not missed that trade. So that's one way you can actually use right to enter trades, right? even though you might have missed the first part of the move. of course, the downside to this is that the market doesn't retrace it, retrace and it continues down lower and you miss the move. But the upside to this is that if the market does retrace, it will be as though you didn't miss the move at the start at all. Yeah, does it make sense? Okay, so let's see what happens next. So in this case you can see the market starts to go up higher and then at this point on this candle we probably would have gotten feel on this trade already. So let's change this to Green Assuming that we are now in a long trade right? our sell limit order is filled. Now what about our stop loss? Again, Let's say it's 180r above this highs. Let's say our stop loss is this. uh, red line over here and let's say our Target. Let's say it's just before this nearest swing low. which is, let's say over here let's set our Target somewhere here. Okay for now, over here. Okay, so in this case you can see that this is one example to how you can actually uh, enter trades right even though the market might have already moved a little bit or quite a lot in your favor. So the gist of this is that as long as your first Target Target or as long as your target has not been hit right, you can actually have that sound limit order there to be placed as though as you know you didn't miss the trade at all. If the market does make a pullback right, and you know, re-test your entry price point. So in this case, this particular trade, you can see that eventually, yeah, eventually would have you know hit your Target because again, it's a cherry pick chart. Okay, this is an important example with an important lesson. So have a look at this chart. this one over here you can see again Market is in an uptrend so we are waiting for you to pull back towards an area of support since it's in an uptrend, so where is support you can see. this is probably an area of support we can agree on. Okay, so again, just black. Okay so what we're waiting for is for the price to retest support, wait for you to take out the lows and then close back up higher into support. Okay so in this case let's see Market breaks below support. This is where sellers are coming in and say oh man many Traders will think the price is breaking below Support Man right now this uptrend is over Market is going to collapse. Guess what? Market did collapse the next candle and then both right. eventually close back up above support. So again, this is what we call a false break and what you can do is again to enter on the next candle open. So let's say the market open at this price point here. Okay, oops, not supposed to be here. Okay Market let's say open at this price point, you go along over here. Let's change this to Green as our entry. Okay let's say our stop loss is the distance below this lows. Let's just change this to rate to kind of like simulate our stop loss and see what happens next. Eventually before we do that, this will be our Target and let's just kind of have it in blue as our Target and what happens next is Market eventually hits our stop loss right? So this is a very important lesson here. which is this is that this trading strategy is not 100 winning rate. So yes I've Cherry Picked a few examples earlier to kind of like illustrate you the concepts Advanced Techniques to pay attention to and stuff like that. but I also want you to understand that this trading strategy even though you're trading with the trend you're trading in a direction of I mean your trading introduction of the train you're buying from support You're looking for a false break. You can still have losers. In fact, you have a series of losers in a row. It happens. So do be prepared for it. I Don't think that this is the Holy Grail man right now. never have a losing trade again. No, trust me, you will still have losing trades. and I want to prepare you for it I Want to be honest and upfront that you know there's no 100 percent 100 winning rate in trading, right? So this false break trading strategy is something that has worked for me I Hope it works for you. go and test it out on your own. but don't be surprised when the losers come because it will come as well. And by the way, right, if you want to learn more about you know price, action trading. You know dealing with candlestick patterns Etc You can go down to my website over here trading with Rainer.com this is the link over here I'll put it somewhere below this video right and you just download this I Think this guy will be useful The Ultimate Guide To Price Action Trading Just click this orange button right, Enter your email address and I'll send you a free copy called The Ultimate Guide To Price Action Trading. And if you want more, you can even download the monster guide to Candlestick patterns as well. It's free so that's it for me, Right for today's trading? Smash the Thumbs Up Button If you have enjoyed this training, if not, then hit Subscribe. Talk to you Soon.