If you are a breakout trader and you notice that high and low are different than actual one. You are right we may have slightly different high and low as compared to Actual high and low of the Day.
This is because we provide real time data that updates almost every second or when a trade happens. But if there are multiple trades in 1 second ( like sometime when market move fast, nifty can have 100 to 200 trades executed in 1 second) then there can be slight difference in the high and low.
While our data is most suitable for most retailers. If still you feel that you need perfect High / Low data. You can go to costly Providers like Global Data Feed. Who will charge 4 to 5 Times higher than us but surely will give you matching High and low Data
Remember: No Low-cost data provider can give High / Low matching Data in 500 pm
Still want to try Amibroker Data Feeder. You can download and install the trial from download page. We also provide crudeoil and natural gas option feed, sensex and bankex option data feed is also available now. Looking for forex data feed in India we got it covered for you
Introduction to High Low Breakout Trading
High low breakout trading is a strategy that involves buying or selling an asset when its price moves above or below a predefined high or low level, often based on recent price action. This strategy thrives on the belief that once these levels are breached, prices will continue to move in the direction of the breakout. Traders are often captivated by this straightforward, almost binary approach, which promises quick profits with minimal complexity. It’s no wonder that this method has garnered a significant following among both novice and seasoned traders.
One of the main reasons traders are drawn to high low breakout trading is its simplicity. In a world cluttered with complex indicators, charts, and financial jargon, a strategy that boils down to “buy when it breaks the high, sell when it breaks the low” appears refreshingly clear. This perceived clarity, combined with the allure of quick gains, makes it highly attractive. The idea that the market’s price action will continue in a predictable path after a breakout seems, at face value, both logical and reliable.
Market Dynamics and the Myth of Predictability
Markets are not simple, linear entities. They are intricate ecosystems influenced by an array of factors including economic indicators, geopolitical events, and the decisions of large institutional players. The myth that price movements can be easily predicted based on past highs and lows fails to account for the role of liquidity providers and market makers who have the power to influence price action. These entities often have a vested interest in shaking out retail traders and creating false signals, which renders simple breakout strategies ineffective.
The Trap of False Breakouts
False breakouts, or “fakeouts,” are the bane of breakout traders. Imagine placing a buy order just above a resistance level, only to watch the price surge for a moment and then plummet. This is a classic false breakout, where the price action entices traders in only to reverse violently. Institutional traders, with their deep pockets and access to more sophisticated data, are adept at exploiting these situations. They know exactly where the stops are set and can manipulate price action to trigger these stops, forcing retail traders into losing positions.
The Psychological Pitfalls in Breakout Trading
Psychology plays a massive role in trading. The fear of missing out (FOMO) can drive traders to enter positions prematurely, only to get caught in a false breakout. Overconfidence, another psychological trap, can lead traders to increase their position sizes without considering the risks, believing that their “perfect” setup will work this time. The emotional rollercoaster that comes with breakout trading often leads to rash decisions, further compounding losses.
Alternatives to High Low Breakout Trading
Instead of relying on high low breakout strategies, traders should consider diversifying their approach. Effective risk management is crucial, as is the use of data-driven decision-making rather than intuition-based trading. Emphasizing research, understanding broader market dynamics, and even employing algorithmic strategies can provide a more balanced approach to trading. Diversification and a deep understanding of market fundamentals can often yield more sustainable results.
Conclusion: Rethinking Breakout Trading Strategies
Breakout trading, especially the high low variety, is not the silver bullet many hope it to be. Traders must be adaptable, continually learning and evolving their strategies as market conditions change. By moving away from oversimplified trading methods and towards more robust, sustainable practices, traders can better navigate the treacherous waters of the financial markets. The key is to embrace complexity, manage risk, and stay informed. Only then can one hope to succeed in the long run.