LOL fractal Jack, bravo!!! Is there more to explain why these things are so beyond previous answers and if so please explain such things?
When a breakout fails, the counter-trend traders feel as if there's now a price ceiling that makes their counter-trend trade safe. So if a stock hits a new high of 50.00/share, pulls back to a trend line, comes back up for a retest of 50.00 and then either fails to make a new high or breaks out very weakly and sells off, short sellers pile in and place a stop above the 50.00 resistance level. If price pulls back and returns once again to retest that high, the weak longs who were flushed out will want to get back into their positions if price moves higher this time, plus the short sellers' stops will be triggered into market orders that will drive price higher.
================= I like the better breakouts[not a prediction, simply probabilities]; where most all the longer, medium trends are in same direction & fundamentals line up with those trends. Its not necesary to make money; but i like better win % ratio also. Question 1] XLF, havent checked on fundamentals. you may want to- LOL; but while most all the 10 year trends are down, thats good, but 1 year, 2 years are up , seasonals are usually bullish NOV. So expect more choppy sloppy sideways trends- I wouldnt trade it short now or long, for a med or long term , too much chop/slop Frankly there is a lot one can do to improve a win ratio; [not necessary to make money/high win ratio] Question 2]To me, prefering a higher win ratio than many of heavy hitting turtles, i classify trends as [a] up [Z] down [ or s], lor like slop-sideways /slop chop XLF on a 1year chart is chop slop sideways trend [ so i wouldnt name it false breakout, fine, if thats what you call it. Since there are so many ways to make money; i find a market wher i can have good probablities of high win ratio[not necessary to make money, simply a prefrence ] & thats trending well with medium & longer trends agree,hope this helps, XLF is NOT doing it]thank you for your question]..................................... Wisdom is profitable to direct; may take 20 or 50 days to post again, but that is not as prediction either.
There are two more trading fractal moves coming up to complete the three slow fractal moves on the slow fractal. the slow fractal had a dominant move up and a non domint move down. we are into the last move of the slow fractal. Move 8 is a "dip" or small retrace. It is seen as a failure to go short and volume is decreasing during move 8. Volume returns and no wall is in site to the north. There is nothing in the way of the final dominant move 9. By annotating the various levels of fractals. you see the slow fractal contains trading moves 1, 2, 3 as a long segment and moves 4, 5, and 6 as a short segment. connect up the RTL and add the LTL of the slow fractal. The slow fractal ENDS with move 9 (dominant) and price does NOT reach the the LTL of the slow fractal container. With the turtle (options based rules) you got in on move 3 and held until the end of move 9. As suggested, there are better trading approaches than the Turtle "nurture" successful operating approaches. Use bars to build move containers. Use these fast containers to build slower containers. Benefit: you always see the FTT's at the end of a container. Also annotate volume. dominant moves end on peak volume; non dominant moves end on troughs. Volume leads price so you add Pro Rata Volume shadow to volume so you know peaks and troughs at beginnings of bars instead of ends of bars. On a 5 min chart you are 5 minutes ahead of the turn, usually. Now you know why the Turtles lagged in trading behind smart money. BUT tutles do get there when running against rabbits. Rabbits are âfreakouât traders which have been used in these blow by blow descriptions. Welcome to the beginner world of trading.
I guess that when you don't know why a breakout failed or not, assessing the probability of the next one to do the same or not is like flipping a coin, which has the probability of 50%. In long run you'll lose because the market is slightly rigged against you (commissions, spreads, etc.). Even if you tried to martingale the system you described, you'd still lose in long run. You should try to work out and trade a system that you understand.
I agree that I should try and work out and trade a system that I understand, that is why I asked the original question. And I thank those that have answered. It takes valuable time and effort to lend this assistance to a total stranger without tangible benefit to self. IDB, I do not recall presenting opinions, rather I stated what I recalled reading and what I wanted to understand better.
================= Something else, the nickname someone gave that [what some call sideways slop trend ], named it false breakout; Actually a pretty accurate nickname If those banks[in your question/example] are loaded up with home real estate loans; could be a nice downtrend, which is what most of the 10 year trends for your question are. But ,stock seasonals tend to be bullish in NOV. As an illustration, lots of REAL estate money has been made; simply buying homes cheap, & selling for a profit, or a small profit, or large profit. Tried to buy some water front property this year cheap; but never could get a real, real good price. Really dont regret not paying up-still huge volume of downtrending waterfront homes, 1year chart And a REALTOR called it a ''flood'' So that one year chart was/is quite helpful And too bad for the banks & sellers/buyer who finance; the gov just put in some ''helpful'' flood control paperwork/red tape on waterfront homes-bank financed. Strangley it doesnt apply to waterfront cash buyers.