Technical Teaching Guide — Trading Following Key Level Breakouts

Trading Model: Key Level + Breakout + Pullback Entry

First, identify key levels
These key levels must possess strong support or have backing from major players, and should be easily identifiable at a glance on the chart with no ambiguity. Finally, observe where this key level sits within the current trend — early stage? Mid-stage? Late stage?

Next, observe the breakout of key levels
When price breaks through a key level, the strength of the breakout must be identified and categorized as weak, moderately strong, strong, or very strong. Only focus on moderately strong and strong breakouts; avoid weak breakouts as they may be false breakouts, and avoid very strong breakouts as they consume too much momentum—extremes reverse, especially at trend late stages (with uptrend breakouts as our direction), possibly marking a bullish climax and trend reversal.

After the key level breakout, price will definitely create a new high. This new high should maintain a certain distance from the key level—neither too close nor too far. Too close indicates weak breakout strength; too far means either serious depletion of upside space, or if subsequent pullbacks are too deep, it's unfavorable for trend recovery and continuation. Therefore, the distance between the new high and key level should be moderate!

Another important consideration: the distance between a key level and the next key level after breakout. If the distance is small, merge these two key levels into one key level zone, then observe the breakout again. If we don't merge them, we easily make this misjudgment: price breaks through two key levels simultaneously, with the first breakout being very strong but the second being weak—not even forming a true breakout.

Finally, patiently wait for pullback
Once a clear and definite key level is established with a strong breakout, we have a breakout pattern worthy of close tracking and monitoring. Next comes patiently waiting for price to pull back from the new high. During the pullback process, focus on two signals: position and reversal signal.

Regarding pullback position, focus on the breakout level—this is where former resistance becomes support. Price may reverse just above this level or only reverse after breaking below it; as long as it's near this level, it's acceptable. Additionally, we must combine this with stop-loss reversal signals. Entry conditions for pullback: position + stop-loss reversal signal forming resonance.

Note that stop-loss reversal signals may appear multiple times, and some may be failed signals—this is normal and doesn't negate the model.

The above completes a full "key level—breakout—pullback entry" trading model. It's essentially a simple breakout trading model, but the details require us to continuously summarize and accumulate experience.

After pullback entry, the first target is breaking the previous high—only then can the uptrend continue. Of course, several other price movements may occur:

First scenario: price breaks new high, continue bullish bias and hold longs.

Second scenario: price fails to break previous high and continues pulling back. As long as the breakout model hasn't been destroyed, temporarily exit and wait for new stop-loss reversal signals to re-test entry, or hold your stop loss and trail the position.

Third scenario: the breakout trading model has been destroyed, exit and observe.

If price breaks the previous high, we can still follow the "key level—breakout—pullback entry" trading model for continuous trading. However, if price stops creating new highs, we must be cautious about participating in pullback trades. Should it break below the previous low, this trade is essentially concluded. #Gate广场AI测评官