I will keep this post short, so you can get a general idea of this trading style.
First of all, we have a situation where the price could not make a new ATH in 200 days. It's important to notice that we can draw a clear structure with well-defined limits because the price stayed in a clear range between 146 and 114
Now that the structure is clear, it is easy to know if we are observing a clear breakout or a fakeout, thanks to the limits we have drawn and the way the price has respected them.
So, how to proceed now? We ask this simple question. How many times can I find a similar situation like this in the past? Imagine we say four times. Ok, which is the sequence where the price goes from being inside the range towards a new bullish impulse?
Here is where technical analysis will help you create a map or sequence of movements to say, "Hey, there is a pattern here that I can wait." Once you have defined that, draw it in your chart.
In this case, my final filters are:
a) Wait for a new ATH (that's the confirmation that the structure has been broken) b) Wait for a 2 to 4 weeks correction (that means that after the breakout, the price is not able to make a new ATH) c) IF that happens, trade on the new ATH, with a stop loss below the 2 to 4 weeks correction and Take profit on the final Fibo extension d) IF that doesn't happen, do not trade e) Move the stop loss to the entry-level if the price reaches the first Fibo Extension. f) Risk: We will use 2% of our capital on the stop loss. g) Relax and Wait.
As you can see, this is a methodic way of developing a setup that provides a lot of control over your executions, and you can proceed based on a pre-established set of rules. This is extremely helpful to overcome emotions and bring consistency to your strategy.
Remember: Do not try to avoid a stop-loss; create procedures to control them. My win rate right now is 55% - 60%. That means that almost half of the time, I'm wrong; HOWEVER, when I'm right, I make more than 2 dollars of every dollar I'm risking. Trade like a casino!