Thread by @TATrader_Alan

KEY LEVEL (2/3) - Breakout Zone:

We are going to look into the second type of key levels.

👑 Breakout Zone 👑

Like & RT appreciated ❤️
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#alanstapa #technicalanalysis #priceaction

✳️ The concept of key levels is very important in technical analysis (TA).

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Here is my previous thread regarding the first type of key levels.

👑 Support & Resistance (S/R) Flip Zone 👑

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In this thread, we will cover:

➡️ Outline of Breakout zone

➡️ Identifying Breakout zone

➡️ Story behind Breakout zone

➡️ Bullish and bearish types of Breakout zone

➡️ Practical trading examples with Breakout zone

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Outline of Breakout zone:

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Identifying Breakout zone (Bullish scenario):

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Step 1: Look for a horizontal resistance🔴 having at least 2 points rejecting the price to break above it.

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Step 2: When a strong breakout🟠 is identified, the previous resistance🔴 turns into Breakout Zone🟣.

Note that this breakout must be a strong, sharp and definite one, in which it is either a LARGE-sized single candle or a few continous MEDIUM-sized candles.

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Step 3: To increase the accuracy of this setup, we need to compare the momentum between the breakout🟠 and retracement🔵 trend waves.
The retracement trend wave must be WEAK and SLOW comparatively.

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Step 4: Buy order🟡 could be placed when it retraces back onto the breakout zone🟣.

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Story behind Breakout zone:
✳️ An extremely important concept in price action

Q: Why breakout zone could potentially be the enter point of a trade?

A: Buying power comes from:
1️⃣ Range trader
2️⃣ Breakout trader
3️⃣ Trend trader
4️⃣ Random trader
5️⃣ Competent TA trader

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🐃Bullish strategy at Breakout zone:

1. Resistance identification
2. Strong breakout identification
3. Place a buy order at breakout zone

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🐻Bearish strategy at Breakout zone:

1. Support identification
2. Strong breakdown identification
3. Place a sell order at breakout zone

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TA techniques could be used in all instruments, like spot, future or derivative.

In the following examples, Binary Option is used for demonstrating this strategy. This is a simple way to execute your trades with only choosing the direction (up↗️/down↘️) and timeframe⏳.

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Practical 🐃 trading Example 1 of Breakout zone:

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Practical 🐻 trading Example 2 of Breakout zone:

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Looking for key levels is only the first step🩻 in trading.
Interpretation🖥️ and integration🔗 with different TA techniques🧑‍🔧, confluence🥣 and momentum analysis🌊 of price is crucial as well.

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A series of educational thread🧵 will be given out from time to time.

Search🔎 #alanstapa (standing for Alan’s technical analysis and price action) for more tweets.

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More to come 🔜 …

• Base candle zone
• Channel (Ascending, Descending and Rectangular)
• Pennant / Triangle
• Break of Trendline
• Range Axis
• Fibonacci 0.618
• 🔄
• 🔄
• 🔄
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Don’t forget to Reweet.
Much appreciated ❤️

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