The Breakout Trading Strategy I Use to Catch Big Moves
I’ve longed resistance and shorted support for 9 years… This is the exact opposite of what every trader tries to do. In this article, I will share my entire strategy so you can skip years of testing and losses. This is something you will want to bookmark, take notes on, and set time aside to think about. Lesson 1: The Only 2 Trading Strategies Before you can identify good momentum setups, you need to understand what momentum trading actually is. Momentum and mean reversion are opposite strategies based on opposite assumptions. The Two Trading Styles Momentum (where you take a trade betting on a continuation of the current trend)Mean Reversion (where you take a trade betting on a reversal of the current trend) One assumes strength continues; the other assumes strength exhausts. Let’s consider this through a visual example. Suppose price is approaching a resistance level (in other words, a level where there was previously selling pressure, preventing the price from moving higher). Momentum assumes the level will break. You’re betting on continuation.Price approaches resistance, you buy, expecting it to push through and keep running.The level becomes support once broken. Mean reversion assumes the level will hold. You’re betting on rejection.Price approaches resistance, you short, expecting it to bounce back down.The level acts as a ceiling. Same chart. Same resistance level. Opposite strategies. There is no right or wrong. The key is to understand when you are in a momentum trade environment, such that momentum strategies are highly aligned. The next section shows you exactly how to identify when the environment favours momentum (my best strategy). Lesson 1 Summary There are 2 trading styles: momentum and mean reversionMean reversion bets levels will hold; momentum bets levels will breakOne is not better than the other; it depends entirely on the trade environment Lesson 2: Optimal Trade Environment Just opening a long every time price hits resistance won't make us any money. Without the right conditions, momentum dies immediately after the breakout. You enter. It reverses. You're stopped out. That's not bad luck, that's a bad trading environment. The Rowing Analogy Imagine you’re rowing a boat. You either row against or with the current. One makes it easier to row while the other takes a lot more effort. Your boat, or rowing technique, didn’t change… Only your environment did. Trading is the same. Your strategy is your boat. Your optimal trade environment is the current. Now use this 3-filter checklist to ensure you only take trades where a breakout is likely (with the current). Filter 1: How Did Price Approach the Level? What you WANT: A slow, grinding staircase pattern approaching resistance.Each candle makes incremental progress.Higher lows are stacking up.Controlled, deliberate movement. What you DON’T want: A fast vertical spike into resistance.Price shoots up in one or two large candles.After a spike, buyers' strength is depleted and price typically consolidates or reverses.This is exhaustion, not momentum. The staircase pattern shows sustained buying pressure building gradually. When this breaks through resistance, buyers are still engaged and ready to push further. Common mistake: Traders see a strong candle break resistance and assume momentum is strong. But these fast moves often reverse quickly. → Do this instead: Take momentum trades when price approaches resistance in a slow, grinding staircase over multiple candles. Real Trade Example: Slow clear grind into resistance showing an optimal ‘price approach to level’ for momentum. Filter 1: slow grindy staircase ✅ Filter 2: What Did Volume Look Like? Volume confirms whether the price movement has conviction behind it. What you WANT: Gradual increase in volume as price approaches resistanceThis pattern shows controlled, sustainable momentum. What you DON’T want: Flat volume (no conviction) or sudden volume spikes (exhaustion).Flat volume means the move lacks participation.Volume spikes often mark climax points where momentum exhausts.Decreasing volume (why would price break out of resistance now, if volume was lower than before?) Volume should mirror the price pattern, steady and building, not erratic. This strategy works because momentum continuation is most likely when participation is sustained, supply is absorbed gradually, and structure remains intact. Real Trade Example: Around the time the grindy staircase begins to emerge, we see a slow, consistent increase in volume. Filter 1: slow grindy staircase ✅Filter 2: clearly increasing volume ✅ Lastly, Filter 3: Moving Average Crossovers This filter distinguishes trending markets (good for momentum) from choppy, indecisive markets (bad for momentum). What you WANT to see: Moving averages with minimal crossovers. This indicates a directional trend. What you DON’T want to see: Frequent crossovers. This signals chop and indecision. Fewer crossovers = cleaner trend or range = better momentum continuation. Use the 30SMMA (Smoothed Moving Average). ✍️Quick Actionable Step: To add the 30SMMA on your charts: Search for the Smoothed Moving Average Indicator in TradingViewAdd it to your chartGo into settings and change the "Length" to "30" Real Trade Example: Filter 1 (Price Action): slow grindy staircase ✅ Filter 2 (Volume): clearly increasing volume ✅ Filter 3 (Crossovers): minimal MA crossovers ✅ 🎓Lesson 2 Summary Slow grinding staircase approaches have better follow-through than fast spikesVolume should be gradual (increasing or decreasing), not flat or spikingFewer MA crossovers indicate cleaner directional conditions for momentum Lesson 3: Identifying Setups Now you know what momentum is. You also know the optimal conditions for it. Next, you need to know where to execute these trades. Step 1: Draw Support and Resistance Levels Momentum trades happen at these key levels. You need to identify them consistently. I've already written an in-depth masterclass on how to set these levels. I'll link it at the end of this article. Common mistake: Traders draw levels randomly or inconsistently, leading to missed setups or false signals. Do this instead: Use my step-by-step approach at the end of this article. Step 2: Await Your Entry Trigger on the 1-Minute Chart Once you’ve identified a resistance level on your primary timeframe, switch to the 1-minute chart for precise entry timing. Why 1-minute chart? You learn faster. More trades, more chart exposure and more oppurtunities to practice psychology. I’ve added a bonus guide on why you should be trading the 1-minute chart at the end of this article. Real Trade Example: Step 3: Three Filters Before entering, check the three filters from Section 2: Is price approaching resistance in a slow staircase pattern?Is volume gradually increasing or decreasing (not flat or spiking)?Are there minimal MA crossovers (not choppy)? If any filter fails, reduce your risk on the trade. Only take full risk on A-grade setups, not forcing trades in poor conditions. 🎓Lesson 3 Summary Draw levels using the ZCT masterclass approach at the end of this articleUse your entry trigger on the 1-minute timeframe: 2 candle closes above for confirmationCheck all three filters before entering, allocate risk and size accordingly Lesson 4: Strategy Logic: Stop Loss, and Take Profit You've drawn your levels. You've confirmed the setup aligns with optimal momentum conditions. Now you need precise execution. Entry timing, stop placement, and profit targets determine whether you capture the momentum move or get stopped out on a good setup. This is where most traders lose, not in analysis, but in execution. Step 4: Entry Trigger We have established to wait for two consecutive 1-minute candles to close fully above the resistance level. This confirms the level broke and momentum is continuing. Critical execution detail: After the second candle closes above resistance, place a limit order AT the resistance level (now acting as support), not above it. Price often pulls back slightly after breaking out. Your limit order gets filled on the pullback without chasing. Common mistake: Traders wait for confirmation, then market-buy above resistance as price runs away. They enter late with a wider stop and worse risk/reward. → Do this instead: Preset your limit order AT resistance after the second candle closes. Let price come back to you. Real Trade Example: Step 5: Stop Loss A swing low is: the lowest wick in a pullback. Your stop loss goes at the most recent swing low before the breakout. Common mistake: Traders place stops at the nearest swing low, even if it’s only 0.3% away, leading to frequent stop-outs from normal volatility Do this instead: Always measure the distance of your stop loss using the ruler tool on TradingView. If it’s less than 1%, use the next swing low down. Step 6: Take Profit 1R (Equal Distance to Stop) Your take profit target is 1R, the same distance as your stop loss, but in the profit direction If your stop loss is 1.982% away from entry, your target is also 1.982% away, but on the upside. This gives you a 1:1 risk/reward ratio. Why 1R? It’s conservative and achievable. Momentum trades often hit 1R quickly because the breakout has follow-through. You’re not trying to catch the entire move, you’re taking a high-probability piece of it. Over time, as you get data in your journal, you can start extending your profit targets when you see how far your average winning trades go beyond 1R. This way, you’re not guessing where to take profits, but following a systematic approach. Real Trade Example: 🎓Lesson 4 summary Enter after two 1-minute candle closes above resistance, using a limit order at prior resistance (now support) to avoid chasing price.Place stop losses at the most recent valid swing low, ensuring enough distance to avoid normal volatility and minor stop hunts.Set initial profit targets at 1R to capture high-probability momentum continuation in a repeatable, systematic way. Immediate Next Steps✍️: Read the Support and Resistance Masterclass to learn how to draw levels (shared at end of article)Look at 3 charts using the 3 filter checklist to identify a momentum trade environmentUse the strategy steps to enter your tradeGather 30 trades using this method, journalled and reviewed against the criteria 🎓 Final Summary Lesson 1: Momentum vs Mean Reversion Momentum trades bet that price will continue through a level, while mean reversion trades bet that a level will hold and reject price.Both strategies are valid, but performance depends entirely on matching the strategy to the correct trade environment. Understanding this distinction prevents applying breakout logic in conditions where it has no edge. Lesson 2: Optimal Trade Environment High-quality breakouts form when price approaches resistance in a slow, grinding staircase rather than fast vertical spikes.Volume should build gradually to confirm sustained participation, not remain flat or spike from exhaustion.Minimal moving average crossovers indicate cleaner directional conditions where momentum continuation is more likely. Lesson 3: Identifying Setups Momentum trades should be executed at consistently drawn support and resistance levels.Entries are triggered on the 1-minute chart using two consecutive candle closes above resistance for confirmation.All three environment filters must align before taking full risk; weaker conditions require reduced sizing or passing the trade. Lesson 4: Stop Loss and Take Profit Enter using a limit order at prior resistance (now support) after two confirmed 1-minute candle closes to avoid chasing price.Stop losses should be placed at the most recent valid swing low with enough distance to avoid normal volatility and minor stop hunts.Initial profit targets are set at 1R to capture high-probability momentum continuation in a repeatable way. 🎓What Changes From Here The next time price approaches resistance, you won’t have to guess if it will break out. You’ll know when a breakout has real momentum, when volume confirms it, and when conditions support follow-through. You’ll also execute with defined entries, stops, and targets. #CryptoZeno #tradingStrategy
Those following closely know we've been talking about $AKE accumulation from day one. Since we first mentioned it the price has nearly 10x'd.
Two days ago I mentioned roughly 9.5 billion AKE leaving InvestorsPool and several large ERC1967Proxy wallets. I'm now seeing the receiving wallets making transfers to different addresses in small chunks.
You can check the entries for those wallet addresses in the visuals below.
I think they're preparing for an operation. For days we've been seeing dozens of transfers that I believe are designed to make tracking harder.
Setting onchain aside and looking at volume: there's been a 15% drop in the last 24 hours. Futures volume at $854M against only $6.22M in spot.
For a token with a $100M market cap that tells you just how unhealthy this rally is.
They're not moving the tokens from wallets to exchanges. The low circulating supply is what's causing these sharp swings in both directions.
Meanwhile short positions continue fueling the upside. Long/Short ratio at 0.65, slightly higher than yesterday but still hasn't broken above 1.00. Shorts are dominant and this increases the short squeeze probability.
On the negative side there are some very sharp and notable liquidity clusters at certain levels.
$0.0028 - $1.14M $0.0008 to $0.0011 range - $1.5M $0.0005 - $1.27M
If it enters a downtrend hitting these levels is likely.
Given this is a futures-driven rally, dropping it to these levels could take 5 minutes. Finding the top is impossible of course.
On top of the addresses from my previous post, more transfers went out over the last 24 hours. Some of them:
And notably, one of the wallets from the previous post received another 7B:
The wallets from the first post are still stacked up. Current balances:
That is around 16.5B more on the move in a day, and the receiving side keeps growing. Same pattern so far. These wallets still need to be watched for any selling or further distribution.
Heavy leverage on a small cap: $COTI COTI moved hard in the last 24 hours. The first level I shared yesterday at $0.0132 got hit, and $0.0154 is still on the table. If the trend holds over the coming hours, that level is reachable too.
Futures volume is running at roughly 18x the market cap and OI is almost equal to the entire mcap. For a token this size that is a serious amount of leverage and speculation.
Funding on Binance is hourly and sitting around -0.15%. Shorts keep paying longs, so the pressure is still there.
These ratios matter. When futures activity overshadows the mcap like this, moves come fast, but reversals can be just as sharp. Worth keeping a close eye on whether volume and OI can hold up.
Futures volume is running at roughly 11x the market cap, and OI is actually higher than the entire mcap. For a coin this small, that is heavy leveraged interest.
On the long/short side it gets interesting. Binance account ratio sits at 0.60, so most accounts are short. Top trader accounts are at 0.72, but their position ratio is 1.49. In other words, the big players are positioned long.
Funding keeps printing negative. Shorts are paying longs.
Rising spot volume, a crowded short side and OI above mcap is a setup that carries short squeeze potential.
That said, the futures/spot gap is still wide, so the move can stay purely speculative. Whether the volume holds is the key thing to watch.
I've been watching BANK closely for days now, so I wanted to take another detailed look.
24h futures volume is around 3.82B and spot volume sits near $144M. Both are still high, but there's been a roughly 15% drop in volume over the last day.
Long/Short ratio is at 0.59, so shorts are dominant on the surface. But the top trader L/S ratio is 1.43, meaning the whales are still positioned long.
Small fish shorting, big fish longing, basically.
Looking at the liquidation heatmap, most of the buildup is sitting below current price. Levels worth noting:
@BabylonLabs_io doesn't ask every participant to do the same job.
Bitcoin Stakers provide economic security. Finality Providers sign finality. Validators keep the Babylon chain running. Builders turn that infrastructure into real applications.
That separation feels intentional rather than complicated. Networks often become harder to scale when security, operations and application growth depend on the same group of participants. Babylon splits those responsibilities from the beginning, allowing each role to evolve without redesigning the entire system.
That also changes how I view $BABY The token isn't only tied to user activity. It sits inside an incentive model where different participants contribute different types of value to the same network.
One thing I'm curious about: if the ecosystem keeps expanding, will this four-role architecture still be enough, or will Babylon eventually introduce another participant layer?
Price continues to follow the same time pivots as the 2018 bear market.
If price continues to respect these pivots, the next focus shifts to a move lower into mid-August. Just as the July lower high wasn't as strong as expected, the August low may also be shallower than most expect.