Technical Teaching Popularization Post - Follow Trading After Key Level Breakthrough

Trading Model: Key Level + Breakthrough + Pullback Entry

First, identify the key level
This key level must have strong support or be controlled by major players, and should be easily identifiable at a glance on the chart with no ambiguity. Finally, observe where this key level sits in the current trend - early stage? mid stage? late stage?

Next, observe the breakthrough of the key level
When price breaks through the key level, the strength of the breakthrough must be identified and can be categorized as weak, relatively strong, strong, or very strong. Only focus on relatively strong and strong breakthroughs; avoid weak breakthroughs as they may be false breakouts, and also avoid very strong breakthroughs as they consume too much momentum, creating the risk of reversal, especially in late-stage trends (with bullish breakthrough direction), which may result in a bullish climax and trend reversal.

After the key level breakthrough, price will definitely create a new high. This new high must have a certain distance from the key level - not too close, not too far. If too close, it indicates weak breakthrough strength; if too far, it may either seriously deplete the upside space or, if there's a deeper pullback later, it will be unfavorable for trend recovery and continuation. Therefore, the distance between this new high and the key level should be appropriate.

Another point to note: the distance between the key level and the next key level after the breakthrough. If the distance is small, you can merge the two key levels into one key level zone, then observe the breakthrough situation. If we don't merge and consider them separately, it's easy to make this misjudgment: price simultaneously breaks two key levels, with the first breakthrough being strong, but the second breakthrough not as strong - even weak or failing to form a breakthrough.

Finally, patiently wait for the pullback
Once you have a clear and distinct key level and a strong breakthrough, a worthwhile breakthrough pattern for us to track closely is established. 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, pay special attention to the breakthrough level - this is where previous resistance turns into support. Price may reverse above this level or may reverse only after breaking below it; as long as the reversal occurs near this level, it's acceptable. We also need to combine this with stop-drop reversal signals. Entry conditions for pullback: position + stop-drop reversal signal, forming a resonance between the two.

It's important to note that stop-drop reversal signals may appear multiple times and may include failed signals - this is normal and shouldn't negate the model.

Above is a complete "key level - breakthrough - pullback entry" trading model. It's actually a simple breakthrough trading model, but the details in the process require us to accumulate experience through continuous summary.

After entering on pullback, the first target is to break the previous high, so the breakthrough trend can continue. Of course, several other price action scenarios may occur:

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

Second scenario: price fails to break previous high, price continues pulling back. As long as the breakthrough model hasn't been invalidated, you can temporarily exit and wait for a new stop-drop reversal signal to test re-entry, or hold your stop loss position for trailing.

Third scenario: the breakthrough trading model has been invalidated, exit and observe.

If price breaks the previous high, we can still follow the "key level - breakthrough - pullback entry" trading model for continued trading. However, if price fails to create new highs, we must be cautious about participating in pullback trades. If it breaks below the previous low, this trade is essentially concluded.#Gate广场AI测评官