Identify Breakout
Which system do your prefer to identify breakout. Or (those who do not want to share system), please tell which indicators do you mainly use to identify breakout.
I am in the middle of writing a breakout system. As soon as it completes I will share it with you. But I would like to have different views on how other traders identify breakout.
Trend lines and/or MAs.
They r simple yet effective. Most of the times I use trendlines alone to identify breakout.
Stick to your rules
Yes trendlines and MAs are a great way to identify breakout but there is no guaranteed way. Trendlines are probably the best way if price is not moving in range.
Originally posted by ChampYes trendlines and MAs are a great way to identify breakout but there is no guaranteed way. Trendlines are probably the best way if price is not moving in range.
Well, IMO, it depends on trader style. For us, it may be trendlines but for others it can be different. For example fundamental traders will not care about breakouts.
Stick to your rules
In past, I have used MAs but now I try to avoid trading when market is range-bound. Sometimes changing timeframe can also be helpful. For example if market is range-bound on daily time frame, it may not be range-bound on hourly.
The good or ill of a man lies within his own will. – Epictetus
Yes MAs r very useful especially to identify trend direction. But I have never used them in range-bound market to identify breakout as they r a bit laggy and may identify breakout when it has actually already occured.
Yes. MAs r a laggy but we can adjust period settings to in order to see quick reversals. It all depends on practice and experience of working with an indicator.
But overall I agree with you that they r not much useful when market is ranging that is why I left trading during range-bound market.
The good or ill of a man lies within his own will. – Epictetus
This is never-ending discussion.
MAs are laggy but useful. There is no doubt about it. All we do in trading is analyze past to predict future. So lag is not an issue here. It all depends on experience as ironical said.
Stick to your rules