Knowing when prices are about to break out

Here are two ways to know when prices are getting ready to break out from a trading range.

When prices are in a trading range, count the number of closes above or below a specific price near the vertical mid-level of the trading range. If 70% of the closes are above the mid-level price, and the market cannot rally and close above reaction highs, a severe correction may be imminent. If a market breaks and cannot close below reaction lows, then expect a rally to carry prices above the reaction highs. E.g. Let’s assume that a futures chart is showing that about 90% of the Closes are above 445.00, yet prices cannot Close above 455.00. If prices finally do Close above 455.00, a powerful buy signal would then be in place.

Another way to determine that prices are about to break out of a trading range is to note if you have a 1-2-3 followed by a Ross hook within the trading range. If both are present, the percentages favor a breakout to follow, and entry by way of a TTE is acceptable.

A 1-2-3 formation followed by a Ross hook is a consistent objective chart pattern for defining that a trend or swing is in process. Once the point of the Ross hook has been violated, this pattern is enough to establish that a trend or swing does exist.

I have Joe's books neatly organized on my bookshelf, paid full retail, so am good to go.

I recommend his book "Trading is a Business".

[Admin edit: Added link to book.]

I too have saved one of my Gorilla Tactics books ( and even paid for it). I guess the thing that bugs me about these Ross posts is that he has that "get paid to trade" at the bottom which is kind like an advertisment to me. It would be different if he was an active participant here and gave his input and time the way JIm Kane does.

To put out quotes like that so people get interested and then google your name seems a bit sneaky to me.

So I guess this is off topic. To be honest I'm not really sure when to stay on topic sometimes. In this case the originator of these posts (Ross never responds) doesn't get involved in the thread they started. So why originate the thread unless you have another motive ? Because he's such a great guy and really wants to help us?. You guys can tell me if I'm out of line and should start another thread.

Bruce

The guys sounds like a shady used car salesman. I think you are right on target Bruce.

Originally posted by BruceM

Hey Red,

I've read that about closes before and always assumed that were talking about daily bars.....what about intraday timeframes? I've heard some use the 5 minute close above or below a breakout point......I guess I'm just wondering if you have any tricks...or have read anything beyond the daily bars

I'm under the impression that Ross only does these posts to keep his name out on the forums without officially spamming so I'm not expecting any qualifications or clarity back from him. Of course proving me wrong would be a good thing!!

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Bruce
We had a close above the DVA; for me this is bullish BUT we got
a small pull back after my bullish signal. It has turned back up.
Thats what I look for. Now will it break out further up
Being rollover and Friday idk.

what time frame for that close RED ? And then my next question would probably be " Why does a close on that time frame matter?

I have 1100 - 1101.75 as the magnet price.....

Thanks Red

The 5' is what I watch the most. If it closes above and DOES NOT
close back below the very next candle I look for a pull back then
a move back up. If it closes back below the very next candle I look
for a reversal.
I look for this on all time frames. It seems to act the same. The daily gives bigger move.
I have seen the 30' 15' and 5' close above/below at the same time for me that would be more bull/bear, also volume is key for me.

deleted my post - off topic

We finished the move to the upside in the globex session.

For those reading this for the first time, see the above post of clarity.