Breakouts are tempting, in fact, most people trade in-line with the direction price is currently moving without much thought; they are reactive with a ‘herd’ mentality. Now, one might say trend following or trading with the herd / sheep is the correct strategy and in theory it often is, but when it comes to the actual trade execution there is always a higher probability area and lower probability area to enter, and trading on the break-down to new lows or on the break-up to new recent highs is often a major trap, especially for novice traders.
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