How to judge true or false breakthroughs?
In trading, there are many investment methods, but as long as they can make stable profits, they are all good methods! But most people often want to have a "magic skill" that can conquer the world with one move!
Among them, the breakthrough trading method is a very common operation method for investors. Of course, there are also many methods, such as moving average breakthrough, pattern breakthrough and various indicator breakthrough methods. I won’t talk about too much here, just judge from the time and strength.
How to judge true or false breakthroughs more effectively? There are two factors:
1. Strength
2. Time
Just like excluding fund management, the stability of the trading system needs to be balanced between the winning rate and the profit and loss ratio!
As long as one of the strength and time of the market breaking moment is strong enough to ignore the other factor, the effectiveness of the breakthrough will be greatly increased!
And the resonance of the two will increase the effectiveness of the break to the maximum value!
There are two general breakthrough strategies:
1. When the market breaks through a certain important support or resistance, go short or go long directly
2. When the market breaks through a certain important support or resistance, go short on the rebound or go long on the pullback
The former needs to pay most attention to the strength of the breakthrough. When the market breaks through a certain key position, the farther the inertia is downward or upward from the key position, the more effective the breakthrough is. Otherwise, it is easy to have a false breakthrough when chasing short or chasing long. Here, the strength at the moment of the breakthrough determines the effectiveness of the break, and the breakthrough time factor here is second.
The latter needs to pay most attention to the time period after the breakthrough. When the market breaks through a certain key resistance upward, the longer the price fluctuates above the key resistance, the more effective it is. Conversely, the same is true when it breaks down the support downward. Of course, if it is combined with the strength of the breakthrough, the effectiveness will be greatly increased.
Both of these judgment factors are important, but the strength may be more important. Of course, both strength and time are a manifestation of long and short potential energy. How to capture this potential energy conversion is crucial!
As a blogger who has been working in the cryptocurrency circle for many years, I am willing to share my experience and insights with you. In front of my fans, I will share my bull market strategy layout free of charge. I am just a free blogger. I need fans and you need reference.
