When everyone is trading, how do they judge the breakthroughs or breakdowns of some key price levels?
Let me share my method:
1. Temporary Breakthrough/Breakdown: The current real-time price crosses the key price level, but the candlestick has not closed;
2. Breakthrough/Breakdown: The closing price of the candlestick has only one crossing the key price level;
3. Confirmed Breakthrough/Breakdown: A candlestick with both opening and closing prices greater than the key price level is confirmation of a breakthrough, and a candlestick with both opening and closing prices less than the key price level is confirmation of a breakdown;
The longer the trade and the lower the leverage, the more vague the judgment criteria should be, such as waiting for daily or weekly confirmation of a breakdown before stopping loss;
Conversely, the higher the leverage and the shorter the trade, the more immediate judgment criteria should be adopted. Did you get a spike loss? That is also a trading cost that must be borne and should be viewed as a reasonable loss;
Lastly, I generally recommend choosing a vaguely correct right-side logic (leaning towards 3) when entering the market, while when exiting and stopping loss, try to choose an immediate left-side logic (leaning towards 1);
I wonder how you judge?
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