Hey hey, what's up my friend, so in today's training i want to share with you four golden rules right on how you can avoid false breakouts, so number one avoid buying into a power move. So what do i mean by a power move? So very simple right? If you see, let's say the market is uh in a range like this okay and then it breaks out any. This is what i call a power move where you have a series of large big bullish, green candles right in a row. Usually, when you see this right, the strong bullish momentum, a series of you know three four big candles in a row - it's probably too late to enter a trade, because at this point in time the market is getting ready to either make a pullback, okay or a Complete reversal so to look at it from a chart perspective.

It looks something like this. This is what i call a power move right. So if you see something like this on your charts all right, this is a signal to you that you know you should wait right, don't hit the buy button just yet so now you might be thinking okay. So when do you enter a trade right? If not, you know uh when you see a power move, so this brings me to my second point: wait for the first pullback.

So what is the first pullback so when the market makes a breakout? Okay, a breakout, the first pullback is literally the first pullback after the breakout. It could look something like this right, something like a bull flag pattern. This is what i call the first breakout. So at this point right, how is this different? Well number? One when you have a first pullback right, it tells you.

One thing is that you know there are. There are buying pressures stepping in right. So this is why your pullback is not a complete reversal. So that's a good thing.

That's a sign of string number two. You now have this: let's say if the price breaks out higher at this point. You now can use this low. This reference point to set a logical, stop loss.

This wasn't available previously after a power move. So when you have the first pullback, you can actually reference. This low to set your stop loss, so this is how a first pullback will look like. So you can see over here.

This is the uh. This is the previous, or rather the area of resistance. Where the price broke out, then he made this first pullback over here. So this looks something like a bull flag pattern and how i would trade.

This is that if the price can break above this highs, i will be looking to buy, and then i can reference this low over here to set my stop loss. I can reference this low over here, or maybe even this low over here, to set my stop loss, i can set it a distance below it and also. Another thing is that you might be wondering: why is there a 20 period moving average over here? So i use the 20 period moving average as a reference guide, because sometimes when the pullback occurs right like in this case, the pullback occurs at this point right. It's still far away from the 20 period moving average and i'm not inclined to just buy the breakout.

Just yet because it tells me that the market has not digest the recent move so until the 20 period moving average has caught up with the price until the 20 period moving average has touched. The low of this uh consolidation. Only then right, that's a signal to me that the market has already digested the recent move and it's getting ready to make the next breakout higher okay. So this is what i call the first pullback.

Another technique you can use is to trade, the brake and re-test. So let me explain so again: let's say the market makes a power move and it breaks out like this. What you can do is you wait for the break and retest, so you re-test this previous resistance, which could become support, and you can look for a bullish entry trigger to go along. It could be something like a hammer like this right.

This tells you that they are buying pressure stepping in and you can look to enter on the next candle open. So it looks something like this right you see over here. This is the area of our resistance, and then the price breaks up makes a nice power move up higher. At this point you should know right: you should not be buying at this high, because the market just made a strong power move could be making a pullback or reversal.

So let's be patient, and in this case we've got a bullish price rejection on this candle here. Looking something like a bullish hammer, no doubt it closed slightly lower for the day, but still it's a bullish entry trigger right where you can look to enter on the next candle open. Okay, another technique to share with you is instead of uh after the price making a breakout, you can actually look to enter your trade right before the breakout occurs, but what you want to pay attention to is to look for a series of higher lows into resistance. So it looks something like this: i can see a series of higher lows coming into resistance: higher low higher low higher low high low.

At this point, when you see this, i can look to buy the breakout of the highs when it occurs. So this is again very different from the buying after power mover power move is, i know, boom right, it just explodes higher. All the energy is expanded, but for this series of higher lows into resistance, all the energy is not expanded. Yet in fact, it's like storing potential energy like getting ready to make a breakout, so you can look for a series of higher lows into resistance and one last final bonus tip that i have for you.

Is this avoid trading against the trend? So this sounds like a bit like dirt, but let me explain so you can see over here. Let's say the market is trending up higher. Then it starts to consolidate okay. Now, let me ask you if you want to be trading the or rather, if you're going to be trading the breakout which direction do you want to be trading? Well, if you look at this chart, they know the market is in an uptrend.

You want to be trading the breakout towards the upside, so if, let's say the market makes a breakdown, avoid shorting it because you're going against the trend. Okay, so this is another tip to bear in mind, avoid trading against the trend and by the way, if you've enjoyed such you know, price action trading techniques, and you want to learn more. You can get a copy of this book called price action trading secrets, uh about 142 pages, full color book, where you'll learn price action trading strategies that will put a link somewhere below this video. So you can get the copy with that's it.

I wish you good luck. Good trading, i will talk to you soon. You.