Breakouts

When traders set their futures price levels, they are commonly looking for either a trade reversal or a trade breakout. Predatory traders will watch these levels too. A “head-fake” is a common term given to a market that appears to breakout but then falls back into the range.
In this article, we’ll discuss the use of market levels in futures trading and how to trade-off key support and resistance levels.
While consolidating markets don’t offer obvious trends, the price balance between bulls and bears leads to the bounded range in which price levels of support and resistance are formed in parallel to each other. This bounded range results in a rectangular channel pattern (or box pattern).
Trading breakouts can be treacherous, but if you follow a few important rules, you can be successful over the long term. The keys, though, may not be what you expect.
Al Brooks provides bar-by-bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500.
Al Brooks provides bar-by-bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500.
Al Brooks provides bar-by-bar analysis on a five-minute chart of the previous day’s prices action in the E-mini S&P 500.
Catching breakouts creates lucrative trades, but false moves can cause a string of losses. Analyzing price action is key to avoiding these head-fakes.
Although the opening-range breakout effectively is defunct in most markets, creative market selection and price reference can bring it back from the brink.
Over the last quarter-century, the opening range breakout has been one of the most powerful and successful trading tools employed by active traders. 24-hour electronic markets have all but eliminated the opening range breakout trading, a new outlook on an old indicator may give this favorite new life.