A trader shows how to catch 9:1 risk-to-reward trades by watching for consolidation below resistance, confirming breakouts with volume spikes, and entering on retests. Stop goes below the retest candle, target at the next resistance level above.
The first time I took a 9:1 R trade, I thought I got lucky. The second time I thought, whatever, it's probably a coincidence. And then by the fifth time, I realized I had found something that most traders never look at. I wait for price to approach a resistance level and then consolidate beneath it. Not every approach is gonna consolidate, and that's really fine. But when it does, I like to mark the high of that range and then the low of this range. Now I watch it. When price breaks above the high that I just marked, the second it does, I check volume. I look for if it spikes or not. If it doesn't, I move on because it's probably going to be a fakeout. But if it does spike, I'm looking at a potential winning trade. When it spikes on this breakout, it means real buyers stepped in and it confirms that the move is real and continuation is likely. Now to enter, what I like doing is letting price retest the level. Rejected sharply, and this tells me that the resistance high now flipped to support. My stop goes below the retest candle, and I'm targeting the next level of resistance above.
