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    Range Breakdown Trading

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    BIG BILLION DREAMS
    The document provides guidance on using a range breakdown or red candle breakdown strategy for trading. It discusses when to enter trades based on candlestick patterns after gaps up or down, retracements, and break of support levels. The document also gives examples of trades and discusses chart analysis on various dates.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Range Breakdown Trading

    Uploaded by

    BIG BILLION DREAMS
    74 views23 pages
    The document provides guidance on using a range breakdown or red candle breakdown strategy for trading. It discusses when to enter trades based on candlestick patterns after gaps up or down, retracements, and break of support levels. The document also gives examples of trades and discusses chart analysis on various dates.

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    Range Breakdown Trading

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    The document provides guidance on using a range breakdown or red candle breakdown strategy for trading. It discusses when to enter trades based on candlestick patterns after gaps up or down, retracements, and break of support levels. The document also gives examples of trades and discusses chart analysis on various dates.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    74 views23 pages

    Range Breakdown Trading

    Uploaded by

    BIG BILLION DREAMS
    The document provides guidance on using a range breakdown or red candle breakdown strategy for trading. It discusses when to enter trades based on candlestick patterns after gaps up or down, retracements, and break of support levels. The document also gives examples of trades and discusses chart analysis on various dates.

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    You are on page 1of 23

    Range Breakdown / Red candle breakdown Strategy

    Where to use:
    1. Big Red candle should form at the top of upper trend may be bearish
    engulfing
    2. We can use it while break a range [it may be in downside]
    3. We can use it after green candle if immediate red candle form.
    4. We will use this if there is no near support level
    To get a good reward

    How to enter:
    1. If price open flat and not break the low then we will wait for 1st
    upside retracement to trap the buyer
    2. After 1st retracement if we get selling candle like DOJI/inverted
    hammer/ hanging man then we will sell there.
    3. If no such candlestick form then we will wait for the price action.
    4. Stop loss will be the high of the selling candle
    5. Target will be at least 1:2 and 1:3
    6. If price open big gap up then we will see a quick selling in 1st 1-2
    candle. We will enter after price action break.
    7. If price open big gap down then no entry – but we may see a
    upside price movement due to profit booking

    Where not to enter:


    If price rejection happen in 1st candle from lower
    side after hitting the target, it means price can
    reverse to upside as it took support near support
    level and reverse from there
    Let’s see the practical:
    7.10.2020: Here price open flat
    13.8.2020: Price open gap up
    9.7.2020: price open gap down:
    26.8.2020: after green near support immediate
    selling candle
    Caution:
    5.10.2020Target done by 1st 5min candle and
    create price rejection then no entry
    Example:
    BEML:

    Bajaj Auto:
    INDEX CHART ANALYSIS
    16.1.2017:
    20.3.2017:
    21.3.2017:
    Opening little flat

    Price action in 5 min chart:


    Shooting Star in 15 min:
    13.4.2017:
    12.5.2017:
    23.5.2017:
    24.5.2017:
    7.6.2017:
    3.8.2017:
    How to trade next day after a big red candle
    formation at the top:
     What is the logic:
     How chart form next day
     How to trade

    Logic:
    While a big negative candle form it means in every swing there is
    seller. So while price try to move upside it will hit seller in every
    move. It means it’s difficult to clear all those swing resistance in one
    go.
    1. So, if open big gap up seller will try to save there stop loss and
    from stating selling will occur and it reached to the low of the
    previous red candle.
    2. If open little gap up sometimes by creating price action /
    candlestick its fall up to the low of the previous red candle and
    after that buyer started to accumulate so price stats moving
    upper side.
    3. If open flat and 1st half it’s crossing the low then in 2nd half it
    will reverse due to profit booking
    4. If open big gap down then 1st profit booking come up to the
    low of the previous red candle and from this position its
    reverse to the lower side.

    What kind of chart we see in next day:


    Most of cases we see a doji candle may be in
    green/red color.
    How to trade:
    1. if open big gap up then by seeing candlestick and price action
    we can sell index fut/stock to the low of the previous red
    candle.
    2. if open flat then we can see a fall upto the low of the previous
    red candle and from there buyer started accumulating there
    position so we can sell PE option.
    3. If open gap down then 1st we will wait for a retracement to the
    low of the previous red candle and from there by seeing
    candlestick , price action or trend line we can sell CE.

    Or you can make a short straddle in option.


    17.8.2020:
    1.9.2020:
    16.10.2020:

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