Some people from community were interesting in my trading method. I still think that it is early for now. I need to improve it. I have many trades with small gains but my losses are big in general. Need to improve gains and degrees lose.
But I think I can share my technical analyze method. Some of you probably heard about trend breakouts. I like that analyze but it does not work all the time. I practicing with technical indicators I found that by using RSI and Volume indicators we can easily identify fake breakouts.

In this article I want to share my RSI + Volume breakout analyzing method.


What is trend breakout?

Trend breakout: We all know that price moves in trends: uptrend, downtrend or side trend. Trend breakout theory says that when price breaks trend it most likely will continue in that direction. Traders following this method will experience that price can move back and create another trend. I am interested in sloping trends.


From chart above we can see that price was moving in uptrend, then it break it and dropped bellow and continued falling by forming downtrend and after it broke it and formed uptrend again. Trend breakout worked well.
But as I wrote before it does not work all the time. So how we can be sure about that? We can use RSI and Volume to conform trend breakout.


RSI breakout: RSI also moves in trends but it changes its trend direction before price. That's why when I see trend in price chart, I start hunting rsi to break its trend.




As you can see from the chart above RSI broke before price broke the trend line. But there is always chance that price will move back to trend. But this is not enough to open trade. To be sure that trend will continue in direction of trend breakout we will use volume. Volume will give us hint if it is bears or bulls in power.

Volume: also have trend breakouts.




As you can see while price were climbing volume was decreasing. This a sign that bulls are weakening. We can see that volume increases on breakout period. This means that bulls and bears are fighting to lead the market. Price continues falling and volume increases. This means bears win. Mostly if next candles will close bellow candles with high volume then price will continue falling. If next candles will be able to closes above the candle with high volume then there is a chance of a price rise.
I mostly use 4 hours chart for this analyze. You have to wait sometime for opportunity but it worth it. I always take profit when I follow this analysis. Hope it will work for others also.
Translate to English Show original