How to scalp using patterns? Best pattern for beginners. Level breakout
By Vladyslav Yudashkin Updated November 21, 2022
Many beginners, when they first open a chart, do not understand where to look and what to trade. Candlesticks, patterns, indicators, signals - it all makes them so confused.
My goal today is to make you the perfect soldier, who understands every detail, feels comfortable looking at the charts, and can notice new setups even before they appear.
Let me tell you right away that just by reading this article, you won't get a ready-made skill, you have to practice. But you will see a lot of examples here and I will give you some leading points that will help you get the skill as fast as possible. I have put all my 8 years of cryptocurrency trading experience into this article and have made sure that it works in practice and is easy for beginners to learn.
Pattern №1 for beginners: Level breakout
How to draw?
Everything is as simple as possible: you need to open a chart, and by candlestick shadows (bar extremums) draw a horizontal line that has been touched at least twice.
Why does it work?
Price rebound from the level means that a large bidder secures it and accumulates its position near it. Once he has collected it completely, he allows prices to go out of the current range in the direction he wants. In addition, there are algorithms and traders who teach to trade levels, because this is the most basic pattern. When there is a level breakout, they push the price along with the big fish.
How to find a strong level?
1. The bigger timeframe the level is traded on, the stronger it is. The potential of the level you find on the 5-minute timeframe is much smaller than the one drawn on the daily timeframe.
2. The more touches, the better. Here everything is simple, the more times the level touched the tool, the more times it proved its strength. Breakout of the level tested 5 times has much greater potential than the level tested twice.
How to trade level breakouts?
Follow these rules and you will always trade level breakouts correctly:
1. Keep track of volume. If the previous touches to the level showed volume, it is better to skip this trade, the level is too well secured.
2. Wait for an impulse. The price should closely approach the level and the volume should increase during the breakout. If this is not the case, then leave before it is too late.
3. The approach should be on small candles. If we approach the level too sharply, it is very likely that we will not break it. It's like driving a car in 5th gear right away - the engine will break down.
That's all. In the future, you'll have to practice, practice and practice again. Do not trade for big money at once, first make sure that you follow all my advice and do everything properly. Open charts and find levels that have already worked out, pay attention to the details and memorize them. You'll do great, you're cool!
See you at the DOM! ✌️