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I would like to know how one can determine if the breakout is legit or false. I have been caught plenty of times buying a false breakout just to be stopped out seconds after my entry.
Is there a way to know before hand if the breakout will be valid? I would also like to know trading strategies to play breakouts.
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I had a similar problem playing breakouts so I stopped playing them. Try timing your entries on the pullbacks instead. It is a more conservative approach but less riskier.
Many time the low or high will be taken out by a few points just to reverse. I think alot of newbies will get caught in this move. They like to short new lows. However, you need to give it a little room (few ticks) to determine whether the breakout is valid or not.
Good luck