Box sections, support and resistance, breakout trading

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When trading, I always think about when the price will rise.

And, by buying just before it goes up, you want to be in the profit zone as soon as you buy.

To make these trades, you must be familiar with day trading.

However, most people do not like to engage in day trading.

This is where problems always arise.

If you buy at a price that is too low and there is no sign of it going up, you will get tired and lose interest in trading.

If this situation continues, you will eventually leave all investment markets and will not even be able to get opportunities.

Therefore, even if you incur losses, you must continue to engage in day trading whenever you have time to maintain your sense of day trading.

Additionally, you need to develop the know-how necessary for day trading.

Some people may be thinking that there is no need for day trading since they will be investing with the goal of short-term trading.

However, if you do not have an eye for day trading,
1. The average unit price is formed at a higher price than expected due to poor timing of purchase.

2. Buy at a price that is too low and miss out on higher opportunities.

Cases like 1 and 2 may occur.

Then, I started trading because the market seemed to be on the upswing, but I think it only amplified my negative thoughts about trading as I entered a pullback period.

Therefore, depending on the market atmosphere, there are separate periods for day trading, short-term trading, and mid- to long-term trading.

The current period is a period of day trading and short-term trading.

In order to transition from this period to a mid- to long-term trading period, one must go through a period of great volatility.

Therefore, as mentioned earlier, if you start trading when the current market atmosphere is more heightened, you may suffer large losses when a period of great volatility begins.

Fortunately, if large volatility leads to an uptick, there is potential for profit from short-term trading.

However, we cannot rule out the possibility that it will eventually turn into a loss because there is a possibility that the price will not respond due to expectations that it will rise further in the future.

In any case, as the current day trading period is likely to continue for a while, it is highly likely that more individual investors will begin trading in the future.

Since this is the time when companies or whales that operate large capital realize profits, once profit realization ends, it is likely to lead to great volatility, that is, a large decline.

At the same time, companies and whales that were unable to buy during the period of great volatility will buy, and eventually a full-fledged upward trend will begin.

Therefore, we need to be careful when trading to survive this trend.

Because you never know when and how the market will change, you should always make profits or prevent increased losses through short trading, or day trading.

So, the current period corresponds to the period of day trading.

(USDT 1D chart)
Currently, the flow of USDT is not very good.

This is because large candles on the USDT chart mean that there is a large flow of funds, which means that many transactions are taking place or there is a lot of movement of funds.

When these candles change to the previous candles, it is expected that the coin market will end the day trading period and enter a period of great volatility.

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As I mentioned earlier, in order to buy right before it rises and be in the profit zone as soon as you buy, you must eventually make a breakout trade.

In order to make a breakout trade, you need to know how support and resistance points and sections are formed at the current price position.

Then, if support is confirmed in the formed sideways section, you should start buying from then on until it breaks upward through the high point of the sideways section or box section.

Otherwise, if you buy after seeing support after an upward breakout, it may be too late for day trading.

A big rise often begins after a decline.

This movement is commonly called a pull back.

Even though the price has fallen, the number of people selling decreases, which means that there are not many people willing to sell anymore, so when the price rises, the number of people selling decreases, so this type of movement is often seen.

There are prerequisites for this.

Before the above movement can be seen, there must be a certain number of candles with long upper tails.

This is because a candle with a long upper tail can be formed to confirm the movement of people trying to sell.

Well, I won't go into more detail because I've heard this story often elsewhere.

(BTCUSD 1D chart)
As mentioned earlier, in order to make a breakout trade, there must be a certain section or point of support and resistance.

Looking at the 1D chart in the example, can you see a certain range or support and resistance lows?

If so, you need to check whether you receive support or resistance at that section or at the support and resistance lows.

You can think of a box section like the chart above.

These box sections or sideways sections are different for each person, so it is impossible to say which is right or wrong.

All you have to do is create a trading strategy that suits you within the set range and trade accordingly to earn profits.

The box section I decided on is as follows.
HA-Low and HA-High indicators are indicators created for trading.

Therefore, it is utilized when starting or ending a transaction.

Use this to form a box section, start buying when support appears in this box section, and continue buying until the box section breaks upward.

Therefore, as shown above, candles that pass the HA-Low and HA-High indicators form a box consisting of low and high points.

If you look at the chart in the current example, you can see that the base of the box is toward the bottom of the box.

Therefore, in order to turn upward, it is expected that the movement will begin as the HA-Low or HA-High indicator moves and forms a new one by shaking it up and down.

The key to breakout trading is at what point must the breakout trade begin.

However, these points vary depending on your investment style, that is, your trading strategy.

Therefore, in order to apply your own trading strategy to a box section created by someone else, you must know the criteria for selecting the box section.

However, most of the time, such information is not provided.

However, this can only be inferred from the pictures drawn on the chart.

You need to be careful because making the inferences your own and creating a trading strategy based on them is like building a castle on sand.

Therefore, in order to make a breakout trade, you must check the following:

1. Is there a certain range or support and resistance range visible at the point where the current price is located?

2. If case 1 applies, how far are the other support and resistance areas from that box range?

If there are support and resistance points or sections within the box section or just above the box section, you must check them because even if you break above the box section, you may not make much profit or may even incur a loss.

The section in the chart box above is 25120.76-28184.89.

And above that, there is support and resistance at 28809.72.

Therefore, if you are satisfied with the profit in the 28184.89-28809.72 range, you can proceed with the transaction. If not, it is recommended to hold the transaction.

Ultimately, trading is done to make a profit, so if the visible profit range is small, it is better not to proceed with the trade at all.

3. Is it possible to take a stop loss when there is no support at the support and resistance points within the box section and the price falls below the bottom of the box section?

You should think that falling below the box range means you have provisionally defined that a further decline, that is, a sharp decline, may occur.

Therefore, you should be able to take a stop loss when the price falls below the bottom of the box section.

If you think the stop loss amount is too large and you cannot stop the loss, it is better not to trade at all.

Check conditions 1-3 above, and if everything is satisfactory, you can check whether you are supported at the support and resistance points, create a buying strategy, and proceed with the purchase.

Otherwise, if you buy immediately when the box section breaks upward, the psychological burden will increase and it may turn into a wrong transaction, so you need to build up know-how through a lot of experience.

The most important thing in my chart is the MS-Signal indicator.

If the price stays above this indicator and the MS-Signal indicator turns into a bullish sign, it means that there is a high possibility of an uptrend and an upward move.

Therefore, in order to trade more safely, you can start buying when the MS-Signal indicator rises above the MS-Signal indicator and the MS-Signal indicator switches to an upward sign and shows support.

However, it is not easy to actually proceed like this.

You need to think about how you will proceed with the purchase.

I will take the time to explain this when I have the chance next time.

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** All explanations are for reference only and do not guarantee profit or loss in investment.

** Trading volume is displayed as a candle body based on 10EMA.
How to display (in order from darkest to darkest)
More than 3 times the trading volume of 10EMA > 2.5 times > 2.0 times > 1.25 times > Trading volume below 10EMA

** Even if you know other people’s know-how, it takes a considerable amount of time to make it your own.

** This chart was created using my know-how.


[Example of exchange chart setup]



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