Simple Day Trading Market Cycle Drills #6: Breakouts are Rare
  1. Intro
  2. Goal
  3. Drill Instructions
  4. Conclusion

Intro

  • This is part of a series on learning the MARKET CYCLE. Many traders contacted me asking for ways to improve this part of their price action reading.
  • 90% of the time the market is sideways
  • Most traders enter like its always a breakout and panic on the pullback.
  • 90% traders lose. So enter and expect a pullback.

Goal

  • We wish REMOVE the bad habit of hitting the button when the market moves. Statistically you are in a CHANNEL or a TRADING RANGE most of the time.

Drill Instructions

  1. Draw BREAKOUTS, CHANNELS and TRADING RANGES like before. See earlier drills.
  2. Tighten the BREAKOUTS so they DO NOT OVERLAP anything.
  3. Remove the channels and the trading ranges.
  4. Repeat until you convince yourself 90% of the time the market is NOT in a BREAKOUT.
  5. So just trade everything like a channel
https://www.tradingview.com/x/xLJUczoD/

https://www.tradingview.com/x/VyBzseVR/

https://www.tradingview.com/x/ggu0P66S/

  • Repeat this drill until you are convinced 90% of the time the market is NOT in a breakout
  • Its very difficult to find a BREAKOUT that cannot be part of a channel.
  • Even the ones I selected below could be argued against

https://www.tradingview.com/x/gPOnLX5G/
https://www.tradingview.com/x/jQIzUzkB/

Conclusion

  • Most traders enter like its always a breakout and panic on the pullback.
  • 90% traders lose. So enter and expect a pullback.

I hope you enjoyed that drill! Please let me know in the comments if you found that valuable.

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I’m Tim

Welcome to Zen Trading Tech.

I’m a Aussie day trader and I post trading tips, practice drills, and indicators that helped my trading get to a professional level.

Everything here is to help train the eyes and hands to trade better. If it helped me I’ll post it for others. Hope you enjoy!