#MyFirstSquarePost New to Binance Square, thrilled to share and connect with everyone here! $EIGEN $BTC
When I return to binance after sometime and my previous experiences have not been so great.
In my early days of trading, I was no stranger to losses. Like many beginners, I jumped into the markets without a solid strategy, thinking that profits would come easy. My primary mistake? Ignoring the crucial role of support and resistance levels, and not having a structured approach to trading. But that changed when I began to dive deeper into the technical side of trading, and most importantly, when I adopted breakout trading.
Early Struggles and Losses
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When I started trading, I was primarily involved with the BTC/USDT and now even in Eigen/USDT pairs. I was constantly getting caught in the marketâs ups and downs, buying high, selling low, and losing money. The root of my problem was a lack of structure. I didnât pay attention to key levels in the market that indicated potential reversals or continuations. Without a proper strategy, I was essentially guessing where prices would move, leading to a string of avoidable losses.
The Turning Point: Support, Resistance, and Breakouts
I knew I needed to overhaul my approach to avoid repeating the same mistakes. Thatâs when I discovered the power of support and resistance levels. These are price points that the market respects over time â support being a price level where an asset tends to stop falling and resistance being a price level where it tends to stop rising.
By analyzing historical price action and identifying these levels, I could begin to anticipate market behavior more effectively. But I didnât stop there. I learned about breakout trading, a strategy that revolves around trading the momentum created when the price breaks out of these key levels.
My Breakout Trading Strategy
Breakout trading is a simple concept, but it requires patience and discipline. Hereâs the step-by-step strategy I follow:
1. Identify Key Support and Resistance Levels: Before entering any trade, I spend time marking the most significant levels on the chart. These could be previous highs or lows, or areas where price had bounced off multiple times.
2. Wait for the Breakout: Rather than trying to predict a breakout, I wait for confirmation. When the price breaks through a key resistance level, it indicates a potential upward trend. Conversely, when it breaks through support, it often leads to a downward trend.
3. Use Volume as Confirmation: A breakout with low volume is often a false signal. I ensure that there is a surge in volume when the breakout happens, which increases the likelihood of the trend continuing.
4. Set Stop-Loss and Take-Profit Levels: Discipline is key in breakout trading. I set a stop-loss just below the support level in a breakout upwards and above the resistance in a downward breakout. This minimizes my risk. Additionally, I determine my take-profit level based on the distance between support and resistance levels.
5. Follow the Trend, Donât Fight It: Once a breakout occurs, I stick with the trade as long as the trend remains strong. Instead of jumping in and out based on emotions, I allow the market to follow through, using trailing stops to lock in profits.
The Results: Higher Accuracy, Better Profits
If you are active #BTCUSDT futures trader, we should certainly connect with each other.
