First, identify the key level This key level must have strong support or represent the main force, and should be easily identifiable at a glance on the chart without any ambiguity. Finally, observe what stage of the current trend this key level is at - early, middle, or late stage?
Next, observe the breakout of the key level When price breaks through the key level, the strength of the breakout must be identified. It can be categorized as weak, relatively strong, strong, or extremely strong. Only focus on relatively strong and strong breakouts; avoid weak breakouts as they may be false breakouts, and also avoid extremely strong breakouts as they consume too much momentum and may reverse, especially in the late stage of a trend (with bullish direction as focus), potentially resulting in a buying climax and trend reversal.
After the key level breakout, price will definitely create a new high. This new high must maintain a certain distance from the key level - not too close and not too far. If too close, it indicates weak breakout strength; if too far, it may seriously exhaust the upside room, or if there's a deeper pullback later, it won't be conducive to trend recovery and continuation. Therefore, the distance between this high point and the key level should be moderate.
Another important point to note: the distance between a key level and the next key level after breakthrough. If the distance is not significant, you can merge the two key levels into one key level zone, then observe the breakout situation again. If we don't merge them, it's easy to create this misjudgment: price breaks through two key levels simultaneously, the first breakout is very strong, but the second is weak or even fails to form a breakout.
Finally, patiently wait for the pullback With a clear and definite key level and a strong breakout, a breakout pattern worthy of our focused tracking is established. Next comes patiently waiting for price to pull back from the new high. During the pullback process, focus on two signals: position and reversal signal.
For pullback position, focus on the breakout level - this is where former resistance turns into support. Of course, price may reverse upon reaching this level from above, or may reverse only after breaking below it. Any reversal near this position is acceptable. Furthermore, we should combine it with stop-loss reversal signals. The conditions for pullback entry: position + stop-loss reversal signal, forming a resonance between the two.
It's worth noting that stop-loss reversal signals may appear multiple times or may show failed signals - this is normal and doesn't negate the model.
The above is a complete "key level - breakout - pullback entry" trading model. It's actually a simple breakout trading model, but the details throughout require us to summarize and accumulate experience.
After entering on pullback, the first target is to break the previous high so the breakout trend can continue. Of course, the following types of price action may occur:
First scenario: price breaks a new high, continue bullish and hold long positions.
Second scenario: price fails to break the previous high and continues to pull back. As long as the breakout model hasn't been damaged, you can temporarily exit and wait for a new stop-loss reversal signal to test entry again, or maintain your stop-loss position and track the trend.
Third scenario: the breakout trading model has been damaged, exit and observe.
If price breaks the previous high, we can still follow the "key level - breakout - pullback entry" trading model to follow the trade. However, if price fails to create a new high, we should be cautious about participating in pullback trades. If it breaks below the previous low, that trade is basically concluded. #Gate广场AI测评官
Technical Teaching and Education Post - Following the Trade After Key Level Breakout
Trading Model: Key Level + Breakout + Pullback Entry
First, identify the key level
This key level must have strong support or represent the main force, and should be easily identifiable at a glance on the chart without any ambiguity. Finally, observe what stage of the current trend this key level is at - early, middle, or late stage?
Next, observe the breakout of the key level
When price breaks through the key level, the strength of the breakout must be identified. It can be categorized as weak, relatively strong, strong, or extremely strong. Only focus on relatively strong and strong breakouts; avoid weak breakouts as they may be false breakouts, and also avoid extremely strong breakouts as they consume too much momentum and may reverse, especially in the late stage of a trend (with bullish direction as focus), potentially resulting in a buying climax and trend reversal.
After the key level breakout, price will definitely create a new high. This new high must maintain a certain distance from the key level - not too close and not too far. If too close, it indicates weak breakout strength; if too far, it may seriously exhaust the upside room, or if there's a deeper pullback later, it won't be conducive to trend recovery and continuation. Therefore, the distance between this high point and the key level should be moderate.
Another important point to note: the distance between a key level and the next key level after breakthrough. If the distance is not significant, you can merge the two key levels into one key level zone, then observe the breakout situation again. If we don't merge them, it's easy to create this misjudgment: price breaks through two key levels simultaneously, the first breakout is very strong, but the second is weak or even fails to form a breakout.
Finally, patiently wait for the pullback
With a clear and definite key level and a strong breakout, a breakout pattern worthy of our focused tracking is established. Next comes patiently waiting for price to pull back from the new high. During the pullback process, focus on two signals: position and reversal signal.
For pullback position, focus on the breakout level - this is where former resistance turns into support. Of course, price may reverse upon reaching this level from above, or may reverse only after breaking below it. Any reversal near this position is acceptable. Furthermore, we should combine it with stop-loss reversal signals. The conditions for pullback entry: position + stop-loss reversal signal, forming a resonance between the two.
It's worth noting that stop-loss reversal signals may appear multiple times or may show failed signals - this is normal and doesn't negate the model.
The above is a complete "key level - breakout - pullback entry" trading model. It's actually a simple breakout trading model, but the details throughout require us to summarize and accumulate experience.
After entering on pullback, the first target is to break the previous high so the breakout trend can continue. Of course, the following types of price action may occur:
First scenario: price breaks a new high, continue bullish and hold long positions.
Second scenario: price fails to break the previous high and continues to pull back. As long as the breakout model hasn't been damaged, you can temporarily exit and wait for a new stop-loss reversal signal to test entry again, or maintain your stop-loss position and track the trend.
Third scenario: the breakout trading model has been damaged, exit and observe.
If price breaks the previous high, we can still follow the "key level - breakout - pullback entry" trading model to follow the trade. However, if price fails to create a new high, we should be cautious about participating in pullback trades. If it breaks below the previous low, that trade is basically concluded. #Gate广场AI测评官