Breaks out of flags, triangles and such tend to come out of low volume. Breaks of previous highs or lows in a trend tend to occur on strong volume.
Again, interesting. I tend to go with the breakout when it actually occurs. I've found in the past that i'm no good at anticipating the breakout, but I will endeavour to look again. Thanks again for your reply and also to tz.
Damn quiet so far. How can this be? Whatever happened to the morons who went on a buying frenzy as if there were no tomorrow?
Interesting. So basically you're looking at volume. If there was a fair amount of volume, you don't anticipate a breakout and if there is little volume, then you do. Would that be correct? yes this is correct.. constant volume or slighly less or slighly more then I would expect either the trend to continue or the range to continue.. i feel like low volume works best on retraces on the intra day trend... and triangles
Obvioulsy defining a break out really depends on your time frame... a daily break out is much different than a 1 minute break out.. there can and will be a lot of false break outs ona 1 minute chart. I would rather be early and wrong than late and wrong becasue you get a much better entry price.. example.. oil at 101.00 on a bull flag... mkt is bullish... you expect a break out above 101.00 on super low volume at an area of 101.00 to 99.94... if you place a buy stop above 101.. and it breaks out quickly .. then you might get filled at 101.10 or 101.06.. down 60 bucks immediately or even worse.. so lets say oil flirts with 101.15 and you don't get out.. then it drops all the way down to 101.96.. and you get stopped out.. . and then it decides to go up.. again.. guess what you are out and now oil is at 101.25 and you are like damn i was long! So if you buy before the breakout up at 101.97 then you are in for the breakout up... if it retraces.. then you have more wiggle room and less to risk.. and your stop loss will be even lower.. What if you buy at 101.97.. and market breaks down.. guess what... you still have the same stop loss..right.. so what is the big deal.. more times than not.. getting the better initial fill price and being right will offset being wrong on the break outs.. all of this is the opposite for selling before a break down Now this is the same for support resistance lines as well.. buy at support if thinking market will rally and sell at resistance if thinking market will sell off.... No doji is absoluely correct about high .. to extreme volume on market tops and bottoms ..even intra day.. think about what happens at huge volume points... there are thousands saying holy crap .. i gotta get out.. and at that time.. the smart ones are going.. holy crap all the shorts are selling out and thats what is truly pushing this higher.. and the smart ones sell right into that chaos.. usually the price bar range will be extremely large coinciding with huge volume... now.. volume is hidden better than anything.. so goodluck.. the volume everyone sees is not even close to true volume... dark pools.. options... block trades etc.. trading would be much easier if volume was more accurate.. also get rid of any color on you voluem bars.. red or green make all volume bars the same color... Lastly, when you are trying to move large numbers of shares.. you do not do it all in 10 seconds or typically even a minute.. so lots of times.. you puke out (sell) a large chunk of the same stock you want to buy... you sell it .. drop the price..try to start a small panic.. and then buy back on the panic.. sell over the next half hour or so.. even at 100 shares at atime.. when moving thousands and thousands of shares you still have to be careful not to move teh market too much .. anyway.. there is no holy grail.. this is just information that helps me have more confidence when I am making trades. I think Oil will and should sell off along with Gold over this week.. the fact that oil was somehwat weak today and the highs were sold shows me that without any really uncertain news for oil.. then it will drift lower.. and when ghadaffi is foudn or caught or killed.. and there is a true cese fire.. well then my friends.. the bulls will get slaughtered