Why are markets more prone to false breakouts when it is heavily observed?
- Thread starter Amatrue
- Start date
Minor addition of exceptions, for this statement, that questions correlation between the number of users and success of strategy :
* A small number of geniuses , could by trading pipe dream based on planetary/zodiac moves.
* A small group of geniuses (Way of The Turtle), trading a good strategy - while some are still unprofitable/less profitable.
If we talk about business model like drop-shipping, then statement is 100% correct.
I always seem to think different than most, I often wonder why...
Market wizards are pawns(larger Ego's who become vendors), advertising of JS book, selecting those who even be willing to give interviews, anyone realize of hundreds who better traders(who prefer not be noticed) who would never consider to give interviews? Once you are in limelight, your life will change and I think not for the better, it like having to build a 35 million dollar home like Bill Gates cause you are recognizable, your home becomes your own prison. I think there are many other traders who simple like to walk about and not be noticed and done very well for themselves. How did they make it, worked their asses off at some stage and having that 10 year cycle begin. Early 80's, right after 9-11, 2008/2009, all have been incredible for adding funds to one's accounts. Years in between, you are working to consistently grind it out.
False breakout occurs most often in Bull markets because many traders/investors think it too negative to go short.
The big boys are around, they often get in early and don't get out when HFT's and large traders cause false breakouts, who better not to squeeze out than inexperienced traders and those who are trading commercial poor back tested systems?
They are trading any instrument with enough size to trigger known entries of patterns that all charting books written about.
False breakouts happen any time.
Large traders always around, and they have well back tested trading models.
Ever hear "2nd bite of an apple"? The next signal right after retail been exited from false breakout is often the one to jump on.
Often they occur this way, but there are others, lowest low occurs, then comes the failed attempt to go lower, this is Secondary low, this pattern often called A-B-C, many buy above "B", this is most often where price stalls, newbies buying at highs of this area, this area if often where trend is changing, this area produces a "Thrust" bar which is often high of this area and market fades back, newbies stopped out on weak protective stops or breakevens losing a tick, they too scared of taking next breakout to upside, and some reversed as they in that revenge senseless mood. Many good traders fed the exits to newbies and now the good are long for the "2nd bite of the apple" signals. A much less percentages of breakouts happen on first breakout OR you are very experienced and don't do breakouts and got in much lower.
Reading all know systems of where the entries/exits are certainly helps, redesign entries or wait for 2nd bite.
Ok, Sprouts has blueberries to buy, am off to market.
Market wizards are pawns(larger Ego's who become vendors), advertising of JS book, selecting those who even be willing to give interviews, anyone realize of hundreds who better traders(who prefer not be noticed) who would never consider to give interviews? Once you are in limelight, your life will change and I think not for the better, it like having to build a 35 million dollar home like Bill Gates cause you are recognizable, your home becomes your own prison. I think there are many other traders who simple like to walk about and not be noticed and done very well for themselves. How did they make it, worked their asses off at some stage and having that 10 year cycle begin. Early 80's, right after 9-11, 2008/2009, all have been incredible for adding funds to one's accounts. Years in between, you are working to consistently grind it out.
False breakout occurs most often in Bull markets because many traders/investors think it too negative to go short.
The big boys are around, they often get in early and don't get out when HFT's and large traders cause false breakouts, who better not to squeeze out than inexperienced traders and those who are trading commercial poor back tested systems?
They are trading any instrument with enough size to trigger known entries of patterns that all charting books written about.
False breakouts happen any time.
Large traders always around, and they have well back tested trading models.
Ever hear "2nd bite of an apple"? The next signal right after retail been exited from false breakout is often the one to jump on.
Often they occur this way, but there are others, lowest low occurs, then comes the failed attempt to go lower, this is Secondary low, this pattern often called A-B-C, many buy above "B", this is most often where price stalls, newbies buying at highs of this area, this area if often where trend is changing, this area produces a "Thrust" bar which is often high of this area and market fades back, newbies stopped out on weak protective stops or breakevens losing a tick, they too scared of taking next breakout to upside, and some reversed as they in that revenge senseless mood. Many good traders fed the exits to newbies and now the good are long for the "2nd bite of the apple" signals. A much less percentages of breakouts happen on first breakout OR you are very experienced and don't do breakouts and got in much lower.
Reading all know systems of where the entries/exits are certainly helps, redesign entries or wait for 2nd bite.
Ok, Sprouts has blueberries to buy, am off to market.
ROFLMAO it does matter if you are short!
no lol i meant going higher is going higher, doesn't matter it's a 'break out' to new high, or some kind of rebound.
my pro boys want it up, then it up.
lol.
BO's often fail now due to Mean Reversion algos. They often failed when JS wrote MW because the same mentality of those that trading counter-traded BO's in those days are the same ones who now employ Coder/Trading Analyst to create Mean Reversion algos now.
Anything highly watched, BO's or otherwise, by definition will do poorly on average over time. Of course, exceptions exist. They are the exceptions that prove the rule.
Not everyone can be above average...obviously, by definition.
Failed BO's are worth putting on your watchlist tho as the next move, likely to be less highly watched as a result of disgruntled traders losing interest due to losses tend to move on to the next sexy setup. True BO's will often "back & fill" first before taking off again through less 'clutter.'
Anything highly watched, BO's or otherwise, by definition will do poorly on average over time. Of course, exceptions exist. They are the exceptions that prove the rule.
Not everyone can be above average...obviously, by definition.
Failed BO's are worth putting on your watchlist tho as the next move, likely to be less highly watched as a result of disgruntled traders losing interest due to losses tend to move on to the next sexy setup. True BO's will often "back & fill" first before taking off again through less 'clutter.'
if i buy ES and it goes up 1000 ticks was it my buying that made it go up?
others have to buy it too....so no crowd ......means any strategy will fail
like i already said....if a 5 min bar breaks the high of the previous bar that is a breakout.....what is the big deal here
you may be talking about major BO but different people will define major in different ways
even if it closes half way it may still be a BO on a one min