Will Price Breach a Level!? How Can You Possibly Know If Price Will Push Through a Level!!?

in this video traders we’re going to answer the question how can you possibly know

when price will push through a level stay tuned

hey guys warm welcome to you thanks for joining me all right so let’s go check out channel sponsor

there’s a link in the description uh below and all the good stuff for you uh down there too so if you haven’t in the description for or maybe on mobile go check it out okay so this was a question on one of my videos a while back or a comment should i say uh one of my videos a while back i appreciate all your comments guys whatever they may be

you know appreciate them appreciate your support and subscription all that kind of good stuff

okay so this guy had said right listen uh i don’t believe any of this stuff you’re talking about because i’m talking the video about

price pushing through a level and i touched on a little bit of tape slash price action reading and saying okay if you’re looking at the speed of the

of the move you’re looking at the kind of order flow and it’s a thing that you develop over time you develop for reading how price responds it’s kind of really the

the cornerstone of jesse livermore strategy many traders have done that you know they’re feeling how price moves a lot of pictures would do this and one of the kind of um pushbacks that this this this chap had was said hey listen this is total bs i i don’t think you can possibly know

uh when price is going to push through a level he kind of gave an example it’s going to probe and you look at the speed of this and that the other

and to be honest it’s a great uh kind of thing to bring up you know it’s a great point to bring up

and say how could you possibly know because really it just sounds like it’s complete nonsense doesn’t it how can you possibly know there’s a couple of answers to this

the first thing is let’s let’s let’s kind of approach the tape reading aspect and the price action aspect as you get more experience like anything you start to see

patterns that you’ve seen before you start to see

things that you’ve noticed

occur before a break or before a fake now does that mean it’s always going to be the case no it doesn’t an analogy that

not the best analogy you could use if you’re a driver and you’re driving along sometimes you just know that the guy in front of you is going to switch lanes without indicating going to cut you up you just

know it but you just sense it and if you freeze framed in your mind

you’d probably have to go well it was maybe a bit hesitant at the junction back

maybe i saw him out cancel indicator back and i just remembered that now maybe his road position is a bit funny maybe i can see him glancing in the mirror

maybe it’s a type of vehicle you know there’s all sorts of things that you kind of process and go

i’m going to back off a bit because i think that guy’s going to swing over and sure enough he swings over you go well you know but it happens more often than not and that’s a little bit of intuition now

this is the kind of thing that as we’re trading i’m not gonna be too hairy fairy about this guys but this is the kind of thing

that you know great traders will harness they will utilize to their advantage and especially great short-term traders and many great short-term traders are just pure tape readers they will just look at what’s happening on the order book and say that looks like a strong market

that looks like somebody is buying and they don’t care what price they want to pay

i’m going to hit the trade i’m going to take it now the other answer that question is how can you possibly know when price will push your level you can’t that’s the wrong way to look at things with the greatest respect to you

this is not the way to look at stuff the way to look at stuff

is to change your perspective and go you will never ever know

if price is going to go through never it’s impossible

it’s an impossible puzzle to solve all we’re trying to solve with traders is we’re trying to say hey you know what this happened many times before price finally went through a level whether that’s a chart pattern like a good drive up after earnings whether it’s a flag whether it’s whatever whether it’s short-term tape reading and looking at order flow

the speed of the tape the pace of the tape you’re seeing you know large orders you’re seeing how far it’s pulling back you’re seeing all those kind of little nuances

you’ll never ever truly know because validly someone could be sitting right here with a big thick order and you don’t know or someone could come in a millisecond after and put a big thick seller in and smash that thing news could come anything could come out we never know

but we’re not trying to know if we take a step back

and move to the side and look at the problem from a different perspective we’re not trying to know we’re trying to look at things

that occur more often than not before the outcome so if we say okay what occurs before a breakout we think the price is going to break out what occurs before a breakout has done historically

that we could use the clue that give us a sign that potentially that’s the more likely

outcome than a fake out and then we might go some momentum beforehand we might go

some kind of catalyst we might then go some tape pattern we might do this you might do that there’s so many things we can do

and then that’s part of the job that’s not even the whole job and even then we don’t know

that’s why we moved to the risk management portion that’s why it’s so so key because we expressed the trade idea which is it’s a breakout using some of the stuff that we’ve done whether it’s tape whether it’s charts whatever and we’ve gone okay really we think that that when we see that

we are expecting more of the night to break out still don’t know

that’s when we use the risk management that’s when a risk water ratio comes in that’s when all that other stuff comes in to allow us to be

wrong on this that gives us the slight edge of saying hey we’re going to be right we think this is going to break out

we still don’t know and we don’t care that’s when we come in with a risk management and go right where can i express this trade

with the least amount of risk possible and that’s just not the tightest stock possible that’s

based on the pattern and the most amount of reward

and even then the trade might fall at that hurdle it might just rip on and on and so i’m not chasing it because it could pull back massively it might pull back start to flag above highs great now i’m going to get in the trade you might get in a trade on the breakout because you can do there’s so many ways but going back to initial point how can you possibly know you can’t know and that’s not what we’re trying to do and it’s something that hey guys we all fall into this trap i fall into this trap

were at the beginning of my training career i want to know if it’s going to do this

how can i find out how can i solve this problem how can i tell if price is going to stop

how can i tell if price is going to break through how can i know i want to know

and that’s the logical thing that we’re trying to achieve

but in actual fact the breakthrough comes again

sidestepping looking it through a different lens and going

i don’t need to know all i need to know is

okay what’s the likelihood what’s the chances have the chances gone a little bit more in my favor

yes they have because i’ve seen this many times before okay

now this is where the risk reward portion comes in that’s why we get people with strategies

who you know there’s a winning strategy and i’ve shared winning strategies with you guys

there’s winning strategies on my price action program but if you don’t uh employ good risk management then they’re useless

and so it’s bringing everything together we don’t want to know

we don’t need to know but if we have some clues

and then we can allocate the right risk capital or right point

and take the trade in the right manner that’s when over time

our expectation then becomes positive and over time

however many occurrences that is over time

we hopefully get a positive expectancy out of it we’ll hopefully

get profit from that setup from that trade we don’t know the individual trade but over time we’re expecting if we add and stack these layers of veggies together we use strict rush management we’ll still be here 10 20 40 50 years in time

and the markets would have been kind to us anyway appreciate the questions i like these kind of questions guys because they make you know they make you think about hopefully everybody’s thinking now about different aspects and stuff and they’re valid questions are you know the valid pushbacks and questions and appreciate them so anyway guys take care see you next time bye-bye you

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