Presentation on theme: "MarketVuShow and CyberTrader present * Linda Raschke"— Presentation transcript:
1MarketVuShow and CyberTrader present * Linda Raschke www.LBRGroup.com
2What types of patterns precede breakouts What types of patterns precede breakouts? We know that the market alternates between range expansion and range contraction….
3Trend moves come out of Consolidation periods, but these are often marked by noise and false breakouts
4After a trend move to a new level, price winds back to an equilibrium level. Predicting the direction of a breakout from these points is difficult
5We DO know that the longer the sideways line, the greater the potential move
6Technical Structure as marked by waves – this chart still shows solid uptrend – (a downside breakout from a trend reversal from up to down would come on break of low AFTER an A –B_C down)
7The length of the swings up and down are narrowing and an equilibrium point is forming. If you can take a ruler and draw a sideways line that goes through a majority of the price action, the market is setting up a breakout play.
8Once a breakout has occurred – there are plenty of opportunities to trade if you miss the actual breakout. Up waves are shorting opportunities in a down trend
9Once again, a narrowing of swings and a “sideways” line precedes the breakout point – a perfect triangle pattern like this does not always form.
10Short term trend reversal from up to down Short term trend reversal from up to down. Breakouts from trend reversal plays (which often look like mini head and shoulders patterns) tend to not carry as far as breakouts from longer sideways lines and triangles.
11ALWAYS trail a protective stop on a breakout in case it is false.
12A low ADX indicates accumulation or distribution.