Anatomy of a Breakout (Orderflow)
2024-12-24
Category: None

I am sharing my current approach for  trading breakouts , please  share your opinion  on the comments section so we can have a discussion.

 Used Tools: 
 
 Number Bars (Footprint chart)
 Liquidity Heatmap
 Volume Delta
 Volume
 Support and Resistance
 ATR
 


 For bullish resistance breakout z
 
 we setup alarms that alerts us when price is 2 atr below the resistance
 when alarm triggered we set to watch as price approaches towards the resistance 
 we expect higher volume and higher delta
 advance on poc and value areas and especially positive readings on footprint on the upper side in terms of liquidity we spot a vacuum zone in the target direction right after the resistance for price to advance and Liquidity thinning just below the resistance (indicates sellers pulling orders)
  as we breakout we spot a huge spike in the volume and delta indicating resting orders absorbed by the market buyer
 to confirm we look for not thin prints in the upper side of the candle but a good value area indicating price is doing business over there
 we wait for a confirmation candle with similar profile
 see liquidity flip at resistance becoming support then enter 
 we also consider higher timeframe structure is it trending if ranging where is the range etc and asses volality in terms of is it increasing meaning there is enough volality for a breakout
 For exit we target the end of the vacuum zone aka nearest liquidity or nearest market structure, or a reversal in orderflow.
 

 For bearish support breakout 
 
  We set up alarms that alert us when the price is 2 ATR above the support. 
 When the alarm is triggered, we start monitoring closely.
 As the price approaches the support, we expect higher volume and higher negative delta, with the POC (Point of Control) and value areas advancing downward. 
 On the footprint chart, we look for particularly negative readings on the lower side.
  In terms of liquidity, we identify a vacuum zone below the support, indicating room for the price to drop, and observe liquidity thinning just above the support (indicating buyers pulling their orders). 
 As the breakout occurs, we expect a large spike in volume and negative delta, signaling that resting buy orders have been absorbed by market sellers. 
 To confirm, we look for no thin prints on the lower side of the candle and a well-formed value area below the support, showing that price is establishing value there. 
 We then wait for a confirmation candle with a similar profile and observe a liquidity flip where support turns into resistance before entering the trade.
  We also assess the higher timeframe structure, determining whether the market is trending or ranging, and identify the location of the range if applicable. Additionally, we evaluate volatility to ensure it is increasing, indicating sufficient energy for the breakout.
 For exit we target the end of the vacuum zone aka nearest liquidity or nearest market structure, or a reversal in orderflow.
 

Additional Notes:
S/R lines defined based on daily graph anti trend consolidation zones
we are not defining numeric tresholds because context matters
