How I trade Breakouts at All Time High resistance levels:
Since I can't visibly see the next resistance level to take profit, there are 2 main approaches I take ↓
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Option 1: Hold the position indefinitely until a change in market conditions
• (e.g. the market structure breaks in the opposite direction, or the price action just starts stalling, or the price action suddenly starts behaving very differently and looks very different compared to what it was just recently doing).
• I will only take this approach if the quality of the Breakout Trade is HIGH before entering. (noticeable "staircase" price action coming into the level + very large and consistent increase in the average volume as price is getting closer to the breakout level)
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Option 2: Exit at psychological level where a lot of limit sells are stacked
• this one is the easiest in terms of effort/skill required. If I'm doubting the quality of the trade I'll just take this approach to play it safe.
• just look at the orderbook, find the next big psychological level and frontrun it with your TP.
• you can be confident that the order is not spoofed since most people really do stack limit orders at psych levels.
• if a random huge limit sell is sitting at a random obscure price, these ones are more likely to be spoofs so don't rely on these too much.
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All time high levels often have a lot of action near them and often give either the biggest breakouts or the biggest reversals.
It's a good idea to have some kind of gameplan in place to trade them.
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