1.Breakout patterns. Everyone loves a breakout story: price explodes and traders make a killing… until they don’t.
Here’s how to spot the setups that actually work, understand the psychology behind them, and enter with an edge. 🧵
2.Think of breakouts as the market telling a story.
One side is trapped, the other side is ready to run.
If you can read the psychology behind the pattern, you don’t have to guess where price will go next.
3.Cup & Handle vs Inverse
☕ Cup & Handle → bullish continuation. Weak hands sell during cup; handle = last shakeout. Entry: breakout above handle w/ volume. Confluence: MACD/RSI bullish. Trap: entering too early.
Inverse → bearish. Entry: short below handle w/ volume.
4. Rounded Bottom vs Top
🛁 Rounded Bottom → bullish reversal. Price curves up, weak hands capitulate. Entry: breakout above top w/ volume. Confluence: bullish divergence. Trap: chasing slow curve.
Rounded Top → bearish. Entry: short below bottom w/ volume.
5.Head & Shoulders vs Inverse
🔄 H&S → bearish. Bulls fade, bears step in. Entry: short after neckline break w/ volume. Confluence: bearish divergence.
Inverse → bullish. Bears lose grip, bulls take control. Entry: long after neckline breakout. Trap: pre-break entry.
6. Ascending vs Descending Triangle
📈 Ascending → bullish continuation. Buy higher lows push. Entry: breakout above resistance.
📉 Descending → bearish continuation. Entry: breakdown below support. Trap: early entries; false moves common.
7.Falling vs Rising Wedge
🔻 Falling Wedge → bullish reversal. Sellers weaken. Entry: breakout above trendline. Confluence: bullish divergence.
🔺 Rising Wedge → bearish reversal. Buyers tire. Entry: breakdown below trendline. Trap: entering before confirmation.
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