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How to See a Breakout, before it really happens: Breakout Signals in Descending Channels
'All you need is one pattern to make a living.' -Linda Raschke And descending channel breakout can be that very pattern, if you know how to see a breakout before it really happens. This book will tell you • How to anticipate descending channel breakouts before they happen and position yourself beforehand • How to trade descending channel breakout with high probability patterns • How to increase your margin of safety in trading breakouts • How to interpret Volume & Price Action • The practical secrets of RSI • Secret tips about channels In this book, I will focus on only one Descending Channel. And I am going to show you, how you can profitably trade this channel and its breakout with the help of RSI and volume alone, so that you will be able to get maximum returns in minimum period without taking undue risk. Of course, if you can really see a breakout, before it really happens, what can be better than that? I am not a SEBI registered analyst. The author is not an investment advisor and the information being given in this book is for study purposes only.
203 pages, Kindle Edition
Published April 12, 2020
464 people are currently reading
146 people want to read
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Displaying 1 - 12 of 12 reviews
February 26, 2021
After dedicating 75% of the February month to understanding different Option strategies, I realized that the underlying movement is very important when it comes to choosing the right option. Sudhir Dixit, in his book, has explained in understanding the direction of the stock in a lucid manner. The term 'Buzzword' is to this author, what 'strategy' is to consultants.
Before going ahead, let us understand what breakout means. A breakout refers to when the price of an asset moves above a resistance area, or moves below a support area (Source: Investopedia).
It is more important for small & retail investors/traders to understand where the stock will find support and resistance. We do not have insights and insider news like big institutions and powerful people have. The author has taken the effort to explain the movement of some prominent (current and erstwhile) stocks and spot trends.
If one is able to understand the psyche and operation of big fund houses, the trader/investor is likely to profit in a great manner.
This book teaches us to be smart in spotting those trends. Let me note few for you:
1) By the time good news about a company is released, the stock is so high that it becomes redundant to buy. The law of the stock market is: volume rises first, news comes later.
2) Choose the direction of the stock from the Monthly chart.Choose price points from the weekly chart.
3) Volume alone does not tell the whole story, price alone does not tell the whole story, but together
they can tell you an exciting story.
4) Trading on penny stocks, especially during breakouts is highly risky. It is completely an operator game and retailers are likely to burn their fingers. Always beware of breakouts on low volume. Not much good comes out of them.
5) Before giving a breakout, the price often makes a half-moon or cup-like shape after touching the resistance line. Price falls for two-three days on low volume. This is perhaps to remove the weak hands or retailers by befooling them to think that now the stock is going down. And when the retailers make an exit (as is evident from low volume), the strong hands give a breakout on volume. Remember, when the big traders make an exit, it is usually on significant volume, as they have to accumulate or distribute heavy quantity.
It is wise to read this book while the market is on as it helps to relate realtime. The understanding of concept is quick. I would also advice to subscribe to Sensibull. It is a nice platform to understand the movement and volume of stocks and the greeks of options.
Before going ahead, let us understand what breakout means. A breakout refers to when the price of an asset moves above a resistance area, or moves below a support area (Source: Investopedia).
It is more important for small & retail investors/traders to understand where the stock will find support and resistance. We do not have insights and insider news like big institutions and powerful people have. The author has taken the effort to explain the movement of some prominent (current and erstwhile) stocks and spot trends.
If one is able to understand the psyche and operation of big fund houses, the trader/investor is likely to profit in a great manner.
This book teaches us to be smart in spotting those trends. Let me note few for you:
1) By the time good news about a company is released, the stock is so high that it becomes redundant to buy. The law of the stock market is: volume rises first, news comes later.
2) Choose the direction of the stock from the Monthly chart.Choose price points from the weekly chart.
3) Volume alone does not tell the whole story, price alone does not tell the whole story, but together
they can tell you an exciting story.
4) Trading on penny stocks, especially during breakouts is highly risky. It is completely an operator game and retailers are likely to burn their fingers. Always beware of breakouts on low volume. Not much good comes out of them.
5) Before giving a breakout, the price often makes a half-moon or cup-like shape after touching the resistance line. Price falls for two-three days on low volume. This is perhaps to remove the weak hands or retailers by befooling them to think that now the stock is going down. And when the retailers make an exit (as is evident from low volume), the strong hands give a breakout on volume. Remember, when the big traders make an exit, it is usually on significant volume, as they have to accumulate or distribute heavy quantity.
It is wise to read this book while the market is on as it helps to relate realtime. The understanding of concept is quick. I would also advice to subscribe to Sensibull. It is a nice platform to understand the movement and volume of stocks and the greeks of options.
March 15, 2025
This book uses the leading indicator (RSI). Author has another book called Magic of RSI. Lets see if it really works on my trades. I know that psychology and discipline with strict rules also are factors to successful trading and not just strategy.
RSI > 60 in multiple time frames + high breakout volume = BUY
Look for RSI bullish regular divergence, reversal candle sticks.
Though this book says descending channels, horizontal channels can also use this technique.
Talks about the early warning or opportunistic signs of price or RSI swing failure.
If RSI > 40, price is still strong upwards and has chance of going upwards.
Trade in volatile wide ranging channels with good volume. Avoid low volume with narrow channels as profits will be very small.
RSI > 60 in multiple time frames + high breakout volume = BUY
Look for RSI bullish regular divergence, reversal candle sticks.
Though this book says descending channels, horizontal channels can also use this technique.
Talks about the early warning or opportunistic signs of price or RSI swing failure.
If RSI > 40, price is still strong upwards and has chance of going upwards.
Trade in volatile wide ranging channels with good volume. Avoid low volume with narrow channels as profits will be very small.
October 16, 2022
Great read for learning some advanced tips in a simply described way
I really enjoyed this author's style. He wrote things crystal clear and with a smooth proof in his sentence structure which made the strategies that are taught very easy to understand.
Anyone who reads this and looks through the abundant amount of graph examples which are marked with answers would improve their trading game tremendously.
I am grateful that you put this on Kindle Unlimited. I love these offers and who knows maybe one day I'll trade some of those foreign Nifty 50's too. For now I'll keep my exchange in currency.
And yes this book works for that too.
I really enjoyed this author's style. He wrote things crystal clear and with a smooth proof in his sentence structure which made the strategies that are taught very easy to understand.
Anyone who reads this and looks through the abundant amount of graph examples which are marked with answers would improve their trading game tremendously.
I am grateful that you put this on Kindle Unlimited. I love these offers and who knows maybe one day I'll trade some of those foreign Nifty 50's too. For now I'll keep my exchange in currency.
And yes this book works for that too.
December 29, 2021
I have been trading in stocks for more than 4.5 years but till now, I had not acquired any knowledge. It was like hit and trial. Like as it happens to many traders like me that stock price rocketed immediately after selling and plummeted after buying. So I thought to acquire some knowledge. This is my first book on stock market.
Author has made the language of the book so simple that even a beginner like me can take out something from book. A simple but effective. Will love to read other books from the author. Thank you Sudhir ji.
Author has made the language of the book so simple that even a beginner like me can take out something from book. A simple but effective. Will love to read other books from the author. Thank you Sudhir ji.
October 26, 2021
Honest Opinion
Facts "Calculate your price points in advance. Calculate your stoploss. If the channel does not go your way, book loss." I don't use RSI but ; Sudhir has provided a lot of trading jewels. I picked up some valuable nuggets. My trading is going to the next level. Thank you Sudhir.
Facts "Calculate your price points in advance. Calculate your stoploss. If the channel does not go your way, book loss." I don't use RSI but ; Sudhir has provided a lot of trading jewels. I picked up some valuable nuggets. My trading is going to the next level. Thank you Sudhir.
December 31, 2021
Useful information. Need to try it out as the author suggests to determine if it works.
Good short read and well laid out charts with markers on the charts to show whats being mentioned - which is a great help.
Sticks to just one strategy with a few peripheral items to explain a break out - Descending Channels, with Volume, RSI and a few patterns to determine breakouts
Good short read and well laid out charts with markers on the charts to show whats being mentioned - which is a great help.
Sticks to just one strategy with a few peripheral items to explain a break out - Descending Channels, with Volume, RSI and a few patterns to determine breakouts
August 23, 2020
Nicely explained Dicending Chanel with volume and RSI
How it started Dicending Channel and when it stopped is explained nicely with examples like chart patterns and candlesticks signals. I m not impressed last 2 chapters
How it started Dicending Channel and when it stopped is explained nicely with examples like chart patterns and candlesticks signals. I m not impressed last 2 chapters
August 23, 2020
Nice book
Really a nice book...quite informative. Hope, I will do better next time. Thanks a lot for this book dear sir
Really a nice book...quite informative. Hope, I will do better next time. Thanks a lot for this book dear sir
September 13, 2020
Excellent. At last a book to understand the charts
At last a book to understand charts and what the candles are telling you
Thank you, perfect for those new to trading
At last a book to understand charts and what the candles are telling you
Thank you, perfect for those new to trading
September 14, 2020
This is a new setup for me. The book explains how to trade descending channel using RSI signals and book profits at breakout.
January 31, 2021
Good perspective
The 'Secret Tips' box carries lot of wisdom. The book is decent for a quick read. You can do a quick read instead of going in detail
The 'Secret Tips' box carries lot of wisdom. The book is decent for a quick read. You can do a quick read instead of going in detail
November 29, 2022
Some good advice, some bad advice.
Interesting read for beginners but it certainly can’t be the only book you base your trading on. There’s too much bad and vague advice.
Interesting read for beginners but it certainly can’t be the only book you base your trading on. There’s too much bad and vague advice.
Displaying 1 - 12 of 12 reviews