Is the increase in volume enough to confirm a break, or do you also look for other confirmation signs?
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Is the increase in volume enough to confirm a break, or do you also look for other confirmation signs?
The volume is important, but combining it with a candle pattern such as an enveloping candle or a pin bar in the break direction will give you a much more solid confirmation.
For me, a break is valid if the volume is significantly greater than in the previous candles, at least 50% higher.If the volume does not increase significantly, I consider it a possible false break and I do not enter the operation.
Good criteria.The key is not to hurry.Even with an increase in volume, he expects a price confirmation, as a clear break of the key level, before taking the operation.
Do you use this strategy only in 1 hour graphics or also in other time frames?
4 -hour graphics also work very well for this strategy, since they filter a lot of noise.The breaks in those frames are usually stronger and less prone to failures.
What do you do if the volume increases, but the price goes back after the break?
When that happens, it can be a failed break.In that case, it is better to get out of the operation quickly and wait another opportunity.Do not get caught waiting for it to "correct".
I prefer to use this strategy in 1 hour or 4 hours graphics.In smaller time frames, there are too many false breaks, and in daily graphics the volume is not always so reliable to confirm a break.If the price goes back after a break with a high volume, I usually wait to see if it breaks the same level or if the setback is maintained.If the setback continues, I leave the operation.
Patience is crucial.Sometimes the setbacks are just a small pause before continuing, but if the price does not show intention to continue with the break, it cuts losses without hesitation.
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