Thread: System based on break + actual volume

Only price action + volume. Indicators are to adorn, not to decide. If I need an RSI to enter, it is that the entry is not clear.

What about risk management? How much risk per operation? Because if you're going into breakups, the SL is sometimes wide.

Maximum 1% per operation. If the consolidation range is very wide and does not allow me to adjust the batch size to keep the risk under control, I simply do not enter. The system is not to force inputs.

It looks like a solid system, but in reality emotions can play against it. How do you manage the psychological part when the price seems to go and then recede strong?

Good comment. The main thing is to accept that not all breaks will work. If you are clear about your process, your edge is to repeat it without altering it. Volume gives you a statistical advantage, not certain. Discipline does the rest.

One of the fundamental keys to operating traversal systems like the one that is proposed here is to understand the previous structure of the market. Not all consolidations are equal, and not all breakups imply opportunity. A consolidation in zone of historical maximums, for example, will not behave like an accumulation in a long-term bassist channel. That is why it is important not only to identify the technical pattern, but also the general context in which it occurs. Another essential aspect is the synchronization with volume. The real volume of futures not only confirms institutional intentions, but also reveals areas of absorption or manipulation. If a break is accompanied by a peak of volume, but the price does not advance with decision, you are probably facing a liquidity trap. Instead, a solid candle with wide range and increasing volume usually indicates genuine market participation. Risk management is not negotiable but you can have a system with 60% of successes and even so you lose money if you place the bad SL or you exceed it with leverage. Personally, I recommend calculating the average of the market range of your last 20 successful trades, and use that as a reference to locate both the goals and areas.

Thank you for taking the time to write this down.

Interesting, but what do you do if the actual volume is not available in your broker?

Very good explanation, it opened my eyes to the use of context.

Thank you for sharing this detailed info.