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Friday, August 17, 2012
Selamat Hari Raya
I like to wish all Muslim readers a Happy & Peaceful Hari Raya.
alex, i hv been noticing yr calling of break out basing on breaking up of downtrend line. base on my experience these are not strong break out . a reliable breakout would need to clear a significant high that a lot of people were caught , that means new stronger hand/hands is willing to take over this price n they consider it cheap or worth to take position . Btw break out is one of the way to get in position but its full of pitfalls n is high risk, the other way is to buy on retracement tks
Upside breakout of an uptrend line (or downside breakout of a downtrend line) is a signal that the trending move is running into trouble. This could lead to a few things: 1. a reversal (most extreme scenario) 2. a change to a trendless or sideway movement 3. a consolidation to be followed by either a reversal or a continuation of prior trend.
As such, your point is valid. For a upside breakout to become a reversal, it should go beyond a strong resistance. If one chooses to gain an early entry, that initial position should not be a large position. Add to the initial position only when the price movement surpasses the strong resistance.
3 comments:
Selamat Hari Raya to all Muslim friends. Have a safe and pleasant journey for all who are travelling.
alex, i hv been noticing yr calling of break out basing on breaking up of downtrend line. base on my experience these are not strong break out . a reliable breakout would need to clear a significant high that a lot of people were caught , that means new stronger hand/hands is willing to take over this price n they consider it cheap or worth to take position . Btw break out is one of the way to get in position but its full of pitfalls n is high risk, the other way is to buy on retracement tks
Hi Saw Kok Leng,
Upside breakout of an uptrend line (or downside breakout of a downtrend line) is a signal that the trending move is running into trouble. This could lead to a few things:
1. a reversal (most extreme scenario)
2. a change to a trendless or sideway movement
3. a consolidation to be followed by either a reversal or a continuation of prior trend.
As such, your point is valid. For a upside breakout to become a reversal, it should go beyond a strong resistance. If one chooses to gain an early entry, that initial position should not be a large position. Add to the initial position only when the price movement surpasses the strong resistance.
Thank you for your sharing.
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