How to Use RANGE BREAKOUT to Find Easy Trades Everyday

Trading With Sidhant
16 Oct 202209:43

Summary

TLDRThe script discusses a simple and effective trading strategy focused on capturing sideways market trends. It emphasizes the importance of identifying breakouts in a range-bound market and using price action indicators. The strategy suggests taking trades on breakouts and setting profit targets at a 1:1 risk-reward ratio, potentially leading to increased profits and reduced losses.

Takeaways

  • ๐Ÿ“ˆ The strategy discussed is focused on quickly achieving profits, emphasizing simplicity and effectiveness based on price action.
  • ๐Ÿ“‰ It's recommended to use this strategy only if you have some experience in the market, as it involves understanding market trends and behaviors.
  • ๐Ÿ” The strategy involves identifying 'sideways' or 'sideways' market conditions, which are captured by observing the market's direction and identifying breakout points.
  • ๐Ÿ“Š The concept of 'selling pressure' is crucial, where the market is constantly being sold at every point, indicating a lack of confidence among buyers.
  • ๐Ÿ The strategy uses the concept of 'range breakouts' to enter trades, where trades are initiated when the market breaks out of a defined range.
  • ๐Ÿ”ข The script emphasizes the importance of observing at least five candles to form a range, with the preference for these candles to be formed after the first 10:30.
  • ๐Ÿ“Œ Entry points for trades are identified when the market breaks below the lowest level (for a short trade) or above the highest level (for a long trade) of the range.
  • ๐Ÿ’ฐ Profits can be taken at a 1:1 risk-reward ratio, meaning the potential profit is equal to the risk taken on the trade.
  • ๐Ÿšซ The script advises caution when the market forms a range and two 'S/L' (stop losses) are hit, suggesting that it might be a good day to close trading.
  • ๐Ÿ”Ž The concept of 'compression' is mentioned, where traders need to discern the type of compression forming in the market, which can influence the direction of the breakout.
  • ๐Ÿ“š The script encourages observing ranges over time to understand how they work and to start trading with small lots to gain experience and confidence in the strategy.

Q & A

  • What is the primary focus of the strategy discussed in the script?

    -The primary focus of the strategy is to capture profits quickly in the market by identifying and trading breakouts in a sideways market.

  • What is the significance of using a zero indicator in this strategy?

    -A zero indicator is suggested for those who have experience in the market, as it can help in making the strategy more effective and simple.

  • What are the three phases of the market according to the script?

    -The market operates in three phases: an upward trend, a downward trend, or a sideways movement.

  • How does the script define a selling pressure in the market?

    -Selling pressure is defined as the point where the market is constantly being sold at every point, either upwards or downwards, indicating a lack of confidence in the buyers.

  • What is the concept of 'good levels' and 'ASL' mentioned in the script?

    -'Good levels' and 'ASL' refer to specific price points where selling and buying activities are observed, indicating potential breakout points in the market.

  • How should traders identify a range for trading in a sideways market?

    -Traders should identify a range by observing any five candles and marking the high and low of these candles as the range.

  • What is the significance of observing the market's behavior at the range's high and low points?

    -Observing the market's behavior at the range's high and low points helps in determining the potential breakout direction and the appropriate entry point for a trade.

  • What is the recommended profit-taking strategy after a breakout in this strategy?

    -The recommended profit-taking strategy is to book profits at a 1:1 risk-reward ratio, meaning taking profits equal to the risk taken in the trade.

  • How does the script suggest managing trades when the market shows signs of a trend change?

    -The script suggests observing the market's momentum and holding trades longer if the breakout is followed by a strong continuation, indicating a potential trend change.

  • What is the importance of observing compression formations in the market?

    -Observing compression formations is important as it can provide insights into the type of consolidation taking place, which can help in deciding whether to enter or exit a trade.

  • What is the advice given for traders who are new to trading ranges?

    -For new traders, the advice is to start by observing ranges and trading in small lots, gradually gaining experience and understanding how ranges work in the market.

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Related Tags
Trading StrategiesMarket AnalysisProfit MaximizationPrice ActionTechnical IndicatorsRisk ManagementMarket TrendsTrading PsychologyFinancial MarketsInvestment Tips