Kardec Trader shares a breakout rule that improved his results to a 5:1 win-to-loss ratio. Price consolidates below resistance, then breaks above on a volume spike. He waits for a retest, places a stop below the retest candle, and targets the next resistance level.
You're not bad at trading. You're losing because you don't know this hidden rule that took my winning trades from being average to netting me 5 times my risk. And what that means was my average win was around $6,000 while my average loss was just about $1,000. So what is this rule? 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, reject it 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.
