- Look for a healthy trend, Here in our above example, the trend is up with significant higher lows formation indicates the buyer’s dominance in the trend during pullbacks. The resistance area is formed with less significant higher highs indicating the temporary exhaustion of buyers at higher levels.
Now looking at both the above scenarios, overall strength favors the buying pressure as the Lows are significantly higher and the retracements are shortening – prices staying at the Higher levels in an uptrend will give you the insight the trend might continue after the breakouts.
But, to spot the greater breakouts we need some additional confirmation to get better target prices than we see in any other breakouts.
- If there is a good buildup of the prices with almost no retracement before the breakout as seen in the above example, such breakouts tend to be bigger as the buyers will be more confident now and fuel the breakout.
Also, the last buildup’s Low will be much higher than other lows in the trend and will be the stop loss for the breakout trade. This will give a better Risk-Reward and capital allocation in such trades will be usually higher to maximize returns.
- Lastly, Since there is No Nearby resistance levels, there will be no barriers to prices, but to move above. This kind of setups are usually seen in the Bull Run as we witnessed recently from August 2020 till now.
For setting the targets, we can use 𝑭𝒊𝒃𝒐𝒏𝒂𝒄𝒄𝒊 𝑬𝒙𝒕𝒆𝒏𝒔𝒊𝒐𝒏 levels. The highs and lows to consider while applying the tools will be the lowest low and highest high of the bigger consolidation are before the small buildup that occurs at the end of the consolidation. 𝑻𝒉𝒆 𝑹𝒆𝒄𝒐𝒎𝒎𝒆𝒏𝒅𝒆𝒅 𝑻𝒂𝒓𝒈𝒆𝒕𝒔 𝒂𝒓𝒆 1.61 𝒐𝒓 2 𝒆𝒙𝒕𝒆𝒏𝒔𝒊𝒐𝒏 𝒍𝒆𝒗𝒆𝒍𝒔 𝒐𝒇 𝑭𝒊𝒃𝒐𝒏𝒂𝒄𝒄𝒊.
𝗝𝗼𝗶𝗻 𝗼𝘂𝗿 𝘁𝗲𝗹𝗲𝗴𝗿𝗮𝗺 𝗰𝗵𝗮𝗻𝗻𝗲𝗹 𝘁𝗼 𝗹𝗲𝗮𝗿𝗻 𝘁𝗵𝗲 𝘀𝘁𝗼𝗰𝗸 𝗺𝗮𝗿𝗸𝗲𝘁 𝗯𝗮𝘀𝗶𝗰𝘀- 𝗙𝗶𝗻𝘄𝗶𝗻𝗴𝘀 𝗦𝘁𝗼𝗰𝗸 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗔𝗰𝗮𝗱𝗲𝗺𝘆~ 𝗙𝗿𝗲𝗲 𝗘𝗱𝘂𝗰𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗖𝗵𝗮𝗻𝗻𝗲𝗹: ⬇️
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