i have been having some success,using vahids type of system,but i usually like to trade on my own,using his system.my question is..what do you do with the broken resistance/support once the takeprofit is hit?do i erase the trendline or what

patrick

Hi Patrick,

We don't delete it usually because it is possible the price retests the broken support/resistance after the breakout. So we need the line to stay on the chart and see what reaction the price will show to it after the breakout.

hi vahid.
when a support/resistance is broken,and the prices start to retest,do you always wait for prices to touch the broken support/resistance to enter a trade.because i have seen cases where prices go further up or down after a breakout then retrace abit without necessarily touching the broken support/resistance.

val.

Hi,

Retesting sometimes happens after the breakout. In many cases, it just touches the broken sup/res and then retraces. Sometimes it succeeds to break through the broken sup/res again. A retesting or testing can be successful or unsuccessful.

The best time to enter, is after a failed retesting and forming a fresh signal. For example, when a support is broken, it goes up to retest and then makes a sell signal below the broken support.

We never know if it will touch the broken support/resistance or not.

hi vahid.
please look at the following image.you can see how the prices went down after breaking support and then started retesting the support.in such a case do you enter with the long candle after retesting or do you wait for the next candle to form.i will appreciate your assistance

patrick.

Hi Patrick,

When a consolidation is formed like that, I wait for a valid support line to form under the consolidation and will enter after the support breakout. Additionally I never enter after a big and long candle. It is too risky.

Hi Vahid,

As long as the next candle breaks below or above the previous candle, it is consider safe to take a position? What other ways can we use to validate the breakout?

Do we use smaller time frame to determine entry?

Hi,

Just candle is enough to show a support/resistance breakout. If a candle closes above a resistance or below a support, it is breakout.

We can use the smaller time frames to determine the entry. This is what we do.

Vahid,

You use the term "valid support/resistance line". What constitutes a "valid" line from a "non-valid" line?

A valid support/resistance line is a line that the market shows reactions to it. To have a valid support/resistance line, you have to connect at least two visible and strong lows/highs.

I will scan through the forum and the articles, but I think the above answer, answers the question that I have in my head.

You teach mostly a break out strategy.....so the question that arises is when to enter.
If I place an order 10 pips above/below resistance/support.....there is the danger of a fake break out
So it seems the safest thing to do is to

1/ wait for a break out
2/ wait for price to pull back
3/ enter when it starts moving in the direction of the break out

I guess this is not really a question, but more just out loud thinking

Keith