Trend line:It is line drawn from at least two higher high or lower low.But three will be best Can be drawn high to low also.It acts as dynamic line of support and resistance for trading.Price alsways respects this type of line. |
| Look at this picture , MACD momentum also small, with corresponding spinning tops formation, So price will go down finally gone also. |
look at the picture below
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look at the picture price is touching 200 MA and reversing
at that moment RSi is overbought. So price will go down. |
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look at the picture, Here trend is drawn and it is down, I added Fibbos fan
price is touching 50% and retraching back to down, As all prices are withinon
channel so it may be corrective wave in larger time frame.
Stochastic is also oversold, so the price will retrace and go down. |
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Look at the candle stick formation, spinning tops with large wick so price will retrace.
Also look for BB as it indicates volatility of market,
Here Spinning tops formation occured at BB upper band
So it is the sign of reversal, price just touched 1.3030 and gone back down. |
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Look at the picture below trend line is drawn and trend is down.
the future price will follow trend line and go down.
Also look at RSI is overbought. I have drawn the trend line
and expect future price will be 1.3030 and then will go down. |
So by using these Indicators we can differentiate breakout from fake out or false break out.
Indicators used here
- BB
- Fibbos fan
- Trend line( HH,LL)
- Stochastic( oversold/overbought0
- RSI(oversold/Overbought)
- MACD
Steps to avoid fake out.
Step 1 , draw trend line
Step 2 See Stochastic/RSI oversold/overbought position
Step 3 MACD to see small or large momentum
Finally Add BB to see sign of reversal
Its all practice which make you a better trader.
Always use SL
