Understand Break down strategy | Best Intraday Trading Strategy/title> <meta name="description" content="The break down strategy is the most reliable chart pattern. To have a breakdown we should have consolidation. The upward breaking of resistance known as a breakout and the downward breaking of support is known as a breakdown. "/> <meta name="viewport" content="width=device-width, initial-scale=1"> <meta charset="utf-8" /> <meta name="keywords" content="break down strategy" /> <link href="http://1sharemarket.com//images/favicon.ico" rel="icon" type="image/x-icon" /> <script> addEventListener("load", function () { setTimeout(hideURLbar, 0); }, false); function hideURLbar() { window.scrollTo(0, 1); } </script>  <link href="css/bootstrap.css" type="text/css" rel="stylesheet" media="all"> <link href="css/style.css" type="text/css" rel="stylesheet" media="all">  <link href="css/font-awesome.min.css" rel="stylesheet">   <link href="//fonts.googleapis.com/css?family=Poppins:100,100i,200,200i,300,300i,400,400i,500,500i,600,600i,700,700i,800,800i,900,900i" rel="stylesheet"> <link href="//fonts.googleapis.com/css?family=Lato:100,100i,300,300i,400,400i,700,700i,900,900i" rel="stylesheet"> </head> <body>  <header id="home"> <div class="container"> <div class="header d-lg-flex justify-content-between align-items-center py-sm-3 py-2 px-sm-2 px-1">  <div id="logo"> <h1><a href="index.html">Intense</a></h1> </div>   <div class="nav_w3ls ml-lg-5"> <nav> <label for="drop" class="toggle">Menu</label> <input type="checkbox" id="drop" /> <ul class="menu"> <li><a href="index.html">Home</a></li> <li><a href="about.html">About</a></li> <li><a href="share-market-classes-in-pune.html">Class</a></li> <li>  <label for="drop-2" class="toggle toogle-2">Dropdown <span class="fa fa-angle-down" aria-hidden="true"></span> </label> <a href="#">Dropdown <span class="fa fa-angle-down" aria-hidden="true"></span></a> <input type="checkbox" id="drop-2" /> <ul> <li><a href="portfolio.html" class="drop-text">Portfolio</a></li> <li><a href="single.html" class="drop-text">Blog Post</a></li> <li><a href="index.html" class="drop-text">More</a></li> </ul> </li> <li><a href="contact.html">Contact</a></li> <li class="nav-right-sty mt-lg-0 mt-sm-4 mt-3"> <a href="login.html" class="reqe-button text-uppercase">Login</a> <a href="register.html" class="reqe-button text-uppercase">Register</a> </li> </ul> </nav> </div>  </div> </div> </header>   <div class="inner-banner-w3ls d-flex flex-column justify-content-center align-items-center"> </div>   <nav aria-label="breadcrumb"> <ol class="breadcrumb d-flex justify-content-center"> <li class="breadcrumb-item"> <a href="index.html" class="m-0">Home</a> </li> </ol> </nav>   <h2> Break down strategy</h2> <p> The break down strategy is a downward move in a security price through the identified level of support that portends further decline. The breakdown occurs on a heavy volume. They move towards the lower tend to be fast. The breakdown is in the downward move as in a security price and identified level of support portends further declines. They occur on heavy volume and move lower tends in duration and severs in magnitude. This identified by traders using technical tools like moving averages, trend lines, and chart patterns. Traders buy the stock when the price will break at a certain price level of resistance below a level of support called a confirming signal. This signal is mainly used for a major move in the market. The situation when price breaks out above the level of resistance and move higher beyond the initial resistance. Technical chart pattern acts as a head and shoulder triangles and flags are near completion. They are present in a formation and signify in the upward price movements for breakouts. </p> <section class="single_grid_w3_main align-w3"> <div class="container"> <div class="row pt-lg-4"> <div class="col-lg-5"> <div class="wthree_pvt_title mb-3"> <h4 class="w3pvt-title">Understanding a Breakdown </h4> </div> <div class="single_grid_text pt-lg-3"> <p>Traders draw trend lines on a chart that connects several swing lows to find areas where prices are susceptible to break down. Heavy volume accompanies a breakdown below the key support level that show participation that moves lower. Technical traders can be close in existing long positions security when it breaks below a support level. When security breaks down traders seek confirmation from indicators and chart time-frame to ensure the move that is not a head-fake. </p> <a class="btn bg-theme mt-4 wthree-link-bnr" href="about.html">view more </a> </div> </div> <div class="col-lg-7 mt-lg-0 mt-4"> <div class="slide-img"> </div> </div> </div> </div> </section> <h3>Trading a Breakdown </h3> <p>Traders will take a short position when the security price breaks down below support. A sell stop-limit order needs to be placed below the support level. So once price breaks down it decline to be intensified as stop-loss order for long positions that are triggered with selling pressure. The volatility is caused by the breakdown that may result in a mediocre fill, due to slippage. Traders wait for a retracement to enter the market. They will place a limit order where the security’s price broke down from an area that has become a resistance level. So entering the market on a retracement is in a better fill than trying to catch the breakdown early. The flip side is the security that may not retrace back to the trader’s limit price. Traders use a trend following indicator as moving average a trailing stop. The breakout is called a technical event that indicates a trend change. </p> <p><strong>Pros : </strong>Here you’ll catch every trend in the market and momentum is in your favor.</p> <p><strong>Cons : </strong>It can be a false breakout as it is psychologically difficult to enter the trade. </p><br> <h4>Conclusion</h4> <p>Trading breakout is a very difficult task and it counter-intuitive. The conviction comes from back testing of breakout strategy over multiple time frames for multiple markets. The only then one will b employ breakout as a strategy. The breakout is known as a complete trading system as it is followed by risk management. It will turn profitable trading system in the long run. They will not buy breakouts after a strong bullish momentum. This occurs because the market is about to reverse. Higher lows into Resistance are a sign of strength and Lower highs into support are a sign of weakness. 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