Strategy Sniper: how to trade a breakout of the level

Strategy Sniper: how to trade a breakout of the level

Strategy Sniper: how to trade a breakout of the level

The most important element of the "Sniper" strategy is one of the graphic designs for continuing the movement. Today we will talk about the breakdown of the continuation of the movement (PPD). Many people are tormented by the question of how the PPD is formed, how to recognize the pattern on the chart? It's simple enough. For more information, see this article.

The first thing to do is to determine the significance of the breakout level, which is always formed at the local price extreme. For this purpose, the moment of breakdown of the nearest opposite historical extreme is important. As in the example below:
This is how you can indicate the horizontal level, which is important for the future breakdown of the price. This is a significant extreme that has broken through the nearest opposite price extreme (top) with a long price movement.

The next stage is waiting for the point of contact of the price with the horizontal level of a significant extreme.
As soon as the price touches the level of a significant extreme, we immediately switch to the working 5-minute timeframe to check the next action to form the correct graphic design. Namely, you need to wait until the price starts to fall below our significant level.
As you can see, the price tried to break the level down three times, but the correct breakdown in our case is the last, third breakdown. Since it is after it that the correct price correction occurs for the broken horizontal level of a significant extreme.
Is it possible to somehow understand whether the correction and breakdown are correct? Everything is quite simple – after the breakdown, keep a count of bars. If there are five or more of them, then you are on the right track to identify the PPD, but if there are fewer, then it is too early to talk about the PPD: this is just a false breakdown.

Everything is fine, we have figured out how to find the PPD, but where can I place a pending sell order, stop orders, and target levels?
As for the entry point itself, we place a pending sell order at the breakout minimum, which means that a short position is executed when our sell stop order touches at 1.1827. We set the stop loss (1.1851) by 5 points plus the bid/ask spread above the maximum of the price correction. And we have two target levels: at the level of 1x and 3x, since we always use the "safe" rule for any graphic design, including PDAs. This important tool of discretionary analysis, especially for beginners, involves opening two positions and maintaining each with different target levels, but the same stop loss at the time of opening both positions.

And now some of the most important rules and recommendations regarding the PPD:

It is forbidden to trade PPD against the trend;

It is forbidden to work with PPD at the time of market consolidation;

It is recommended to find an entry point on the PPD before market volatility increases.
For example, dollar-dependent pairs without the Japanese yen have very low volatility during the Asian trading session. Therefore, during this time period, it is better to refrain from PPD if you see that the order is executed within this period. No matter what your working timeframe is, for breakout structures, in any case, you need a significant movement, and not a market calm, as in the following example.
And an example of a sideways market movement, where the PPD simply has no place.
The presence of rules, as in the example of the PPD, is not enough for a beginner. In addition to all this, you need to be disciplined and follow the trading algorithm without question. And only then, if you have proper practice, you will be able to improve your skills and move on to the next stage of becoming a trader as a professional. You will not be able to achieve results if you treat trading superficially. In order to achieve success, it is not enough to dream about it. It is necessary to work systematically and persistently – only then will success come.

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