TL;DR: Stop blindly following the trading strategies that you learn on YouTube or online. Trading is not that simple. Here are some tips that the GOOD traders know and you don’t.

First step, label support and resistance.

When the price breaks through either of them, “trade”.

Easy win, right?

Absolutely not.

Trading breakouts might work for you sometimes, but it doesn’t mean it will always work in the long term.

You’re just like the gamblers in casinos, earning a couple of hundred dollars out of luck, before losing thousands in the next round.

80% of crypto, forex, or stock trading influencers oversimplify trading and use a no-brainer trading model to gain massive views and subscribers, so they can up-sell their trading courses to you.

Let’s be honest here.

Price breakouts are just one of the many reasons to enter a trade. There are still plenty of confirmations that you should seek before opening a position.

We are going to show you a few extra tips, so you can minimize your losses on buying into false breakouts and increase your win-rate.

Let’s start with price actions

To be a good trader, you have to be familiar with the price actions in the market in a multidimensional way.

Utilize different timeframes to identify trends, which will help you have a daily bias and better anticipate future market trends.

For example, if the market is in a downtrend in the higher timeframe, you shouldn’t attempt to buy a market breakout and anticipate the price will reverse in the lower timeframe.

The two main reasons are because, first, buying at breakouts means you’re buying at a not too favorable price.

And second, the market is rigged.

The market is rigged

Richard Demille Wyckoff, one of the most famous technical traders in the early 20th century, coined the term “Composite Man” to describe institutional-level traders who have huge capital to control the market movement.

“…Composite Man, who, in theory, sits behind the scenes and manipulates the stocks to your disadvantage if you do not understand the game as he plays it; and to your great profit if you do understand it.”

They can easily manipulate the price to create an “artificial breakout”, scaring off retail traders to suck the shares out of them or to sell them for profits.

With the increasing number of prop trading firms and quantitative trading firms, plus the advanced trading algorithms adopted across so many institutions, we, as retail traders, are competing with machines that have billions in action.

How many of us falsely sell to the breakout and buy from the breakout every day? It’s because we don’t think like “smart money”, we are getting outsmarted.

There is only one way to win against the bots, which is to think like them, understand their strategy and price actions. Analyze and find the commonalities and differences between false and real breakouts.

Every individual asset moves in its own unique way, so don’t over-analyze. Focus on your market and your own game. Play it long enough and excel above everyone else.

Learn to utilize indicators

Indicators are organized information derived from price, volume, and time. Therefore, theoretically, they are just by-products of price actions, so they are not something that you can 100% rely on.

However, using indicators can help you better understand the current trend and add confirmation to your bias.

For example, the quantitative trading indicator, TradeDots, labels market reversal pivots with real-time price action analysis. It is an excellent confirmation indicator that helps traders spot favorable entry and exit prices.

However, blindly trading with the indicator would make you miss the larger trend. If you understand the market, you would not follow the indicator every time, but use your own experience to decide whether the signal is a good trading timing.

Therefore, indicators should never be a standalone strategy any trader should adopt.

For anyone who thinks it is enough to use indicators to trade without looking at price actions, they are putting their hard-earned money at risk.

Bottom line

Before you follow another trading indicator or strategy that you learned on YouTube, think again.

If it is that easy, why isn’t everyone rich yet?

Backtesting results can also be manipulated and cherry-picked. Therefore, do not get fooled again by those so-called influencers on the internet.

Start building your own trading strategy with your own interpretation of the market and improve your model with your own trading experience.

Trading is a skill that requires hard work and patience. Do not rush into making a lot of money like others advertise themselves to be.

What looks effortless to an experienced trader might take them 30 years of experience and hard work.

If you are here for a short-term profit, then trading is not for you.

If you think there is an easy strategy and formula for profits, then trading is not for you either.

The best traders are those who stayed till the end.

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Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial advice. Trading involves risk, and it is important to conduct thorough research and seek professional guidance before making any investment decisions. Prospective investors are encouraged to perform their own due diligence or consult a financial advisor before making investment decisions.