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Trading False Breaks Print
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Non Farm Payroll, NFP days, are well known for surprises and violent whipsaws.

False break outs are either the bain of the Forex traders life or one of the best trading opportunities available. I go with the latter view, I'm seldom comfortable with breakouts as there is a very high probability of false breaks so I like to be on the look out for failing breakouts as the probability of a move against the previous trend is higher.

Trader Vic, Victor Sperendeo, detailed the 2B false break in his 1991 book 'Trader Vic, Methods of a Wall Street Master' Take a look at the picture below.

This is how to trade them, see the chart and desciption below....

1. Draw a horizontal line at the most immediate high (or low) that is followed by at least one corrective candle that didn't go higher (lower). 2. The candle that makes the next new break out high is marked up with a horizontal line at its lowest point (high). 3. If price now comes back, I want to be selling when the next candle moves lower. Manage the trade in the usual way with scaling out to ensure a profit doesn't become a loss.

 

From the blog

Could this be an Explosive New Year

12/01/2010

Could this be an Explosive

 

New Year?

(Watch the video)

Dear Trader and Clickevents reader

We've just completed the first full week of trading of the New Year without too much market drama. Trumpism has finally expired, exploding in Washington.

Biden-Harris will of course be a safe pair of hands, the Vaccine is on the way and markets are behaving themselves. What's not to like?

And Bubbles...

Jo and Kamala will just keep the money supply, inflation pump pumping, and all that debt will miraculously melt away.

They can then allow the Stock market bubble, Bond bubble, Bitcoin bubble, Gold bubble to deflate gradually.

Alternatively, it all becomes explosive. Watch the New Year video here.

It's going to be a great year for traders.....

As ever, send in your views by replying to this email

Kind regards and best wishes for 2021

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