The breakthrough trading strategy of #突破交易策略 utilizes the momentum when the price breaks through key ranges (support/resistance levels, trend lines, pattern boundaries, etc.) to capture trend initiation opportunities, widely applied in the cryptocurrency market. Here are the core points:
Core Logic
When the price oscillates within a certain range for a long time, the forces of both bulls and bears tend to be balanced; once the price breaks through the range (upward through resistance or downward through support), it usually means one side's strength has prevailed, potentially triggering a new trend. At this point, entering can follow the initial momentum to profit.
Key Elements
• Identifying Breakthrough Ranges:
◦ Resistance/Support Levels: Previous highs (resistance), lows (support), or price areas that have been tested multiple times without breaking.
◦ Pattern Boundaries: Such as the upper and lower boundaries of technical patterns like triangles, rectangles, head and shoulders top/bottom, etc.
◦ Trend Lines: Trend channels formed by connecting multiple highs or lows; breaking above the upper boundary indicates an upward breakout, while breaking below the lower boundary indicates a downward breakout.
• Confirming Breakthrough Validity:
◦ Volume Expansion: A significant increase in trading volume accompanying the breakout (usually more than 1.5 times the recent average volume) indicates high capital participation and a low probability of false breakouts.
◦ Closing Price Stabilization: After the price breaks, the closing price can stabilize above (for upward breakouts) or below (for downward breakouts) the breakout level, avoiding short-lived “spike” breakouts.
Entry and Exit Rules
• Entry Timing:
◦ Entering at the Moment of Breakout: Directly entering when the price breaks the key level and the volume expands (long/short position).
◦ Entering After Pullback Confirmation: After the breakout, if the price slightly pulls back to the breakout level (e.g., resistance turns into support), entering after confirming the support is effective is more prudent but may miss part of the trend.
• Take Profit and Stop Loss:
◦ Stop Loss: Set on the opposite side of the breakout range (e.g., for upward breakouts, stop loss below the lower boundary of the range; for downward breakouts, stop loss above the upper boundary of the range), typically not exceeding 1-2 times the breakout range.
◦ Take Profit: Can refer to the previous trend amplitude, key integer levels, or use trailing stop loss (e.g., following the price increase, gradually moving the stop loss up) to lock in profits.
Precautions
• Beware of False Breakouts: The cryptocurrency market is highly volatile, often experiencing “false breakouts” that lure traders into positions; confirmation through volume and closing price must be strict.
