~Vengeance~ asked:
is the first movement a false. What is the market psychology behind this? I was reading some trading tips on day trading and I got to thinking… how can you tell if this is a false pattern or the real one before getting burned?
{ 1 comment… read it below or add one }
Money management and risk to reward will prevent you from getting burned.
Not every trade is a winner.
Depending on the time chart you’re trading, the candlestick that breaks through the B band - when that candle is finished forming and the next candle starts to trade above the breakout’s candle high - that’s the entry.
The risk is the low of the breakout candlestick’s low.
The reward should be the next resistance point.
If the risk to reward ratio is less then 2-1 don’t take the trade.