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How to confirm a low of day break followed by continuation

Writer's picture: Anthony SpecialeAnthony Speciale
Speciale Analysis

Hey Trader,


Finding Contentment and Assurance in Your Trading Journey


As you navigate the fast-paced and often demanding world of trading, I wanted to share a verse that offers profound wisdom and reassurance:


"Keep your lives free from the love of money and be content with what you have, because God has said, 'Never will I leave you; never will I forsake you.'"

  • Hebrews 13:5


In the competitive environment of trading, it's easy to become overly focused on financial gains. This verse reminds us to keep our lives free from the love of money and to find contentment in what we have. It reassures us that we are never alone; God's presence and support are constant, providing a foundation of peace and security.


Let this verse inspire you to approach your trading journey with a balanced perspective. While striving for success, remember to value contentment and trust in the unwavering support that surrounds you. By focusing on what truly matters, you can navigate the markets with confidence and a sense of inner peace.


Wishing you contentment, assurance, and success in all your trading endeavors!


Be Relentless In Pursuit Of The Will 

Which God Has Set Upon Your Heart,

Anthony Speciale



How to confirm a low of day break followed by continuation

Anthony Speciale here with Hawkeye Traders, and I hope you're having a wonderful day.


Today, we're diving into the critical concept of price breaking through a prior low, often referred to as a "breakdown."


Understanding this can significantly enhance your trading strategies, allowing you to make more informed decisions with a greater degree of certainty.


Identifying Key Levels


The chart we're looking at today is a 3-minute intraday chart of light sweet crude oil futures. While this example focuses on crude oil, the principles apply to any market and timeframe, whether you're trading stocks, futures, forex, or cryptocurrencies.


First, let's identify a significant prior low on the chart. You can see that price initially came down to this level, where buyers stepped in and drove it back up.



As the market approached this area again, we needed to be cautious of potential support or a failed breakdown.


Analyzing Trends and Volume


A quick look at the chart shows the highs are trending lower, indicating a downward bias. A valid trend line, constructed from multiple touches, confirms this direction.


The real insight comes from observing the volume. As the market pushed down to break the prior low, we saw an increase in selling volume.


This is crucial because it indicates that sellers are more aggressive, adding validity to the breakdown.


chart

The Role of Aggression


Understanding market movements boils down to recognizing the aggression between buyers and sellers.


The market doesn't move simply because there are more buyers or sellers; it moves because one side is more aggressive.



Confirming the Breakdown


Let's focus on the critical breakdown moment. Despite a surge in buying volume, the price couldn't push back through what was now a resistance level.


This failure confirmed that the aggressive sellers were still in control. As a result, the market continued to move lower, offering a significant trading opportunity.


Practical Application


This example highlights the importance of understanding the relationship between volume and price action.


It’s not about finding a magical indicator; it’s about reading the market's story through volume and price.


The Hawkeye tools simplify this process by clearly showing who the aggressive party is within each candle.


Join Our Training Webinar


To dive deeper into these concepts, I'm hosting a training webinar. We'll explore the relationship between volume and price action, providing you with practical strategies to apply in your trading.


You’ll gain access to the Hawkeye Volume Indicators and the Volume Mastery Series, which will help you master these principles at your own pace.


Understanding how to confirm a breakdown using volume and price action is a game-changer. It’s not about being scared of a market move; it's about understanding why it’s happening and acting confidently.


If you're ready to enhance your trading skills and make more informed decisions, join me in the training webinar.


Click the link below to register, and let’s take your trading to the next level.



I look forward to seeing you there!


Stay informed, stay focused and stay disciplined!!!



Thank you for reading, and I look forward to seeing you in our next session.


God bless, and have a wonderful day!


If you have any questions or need further guidance, please don't hesitate . . . info@specialeanalysis.com May the markets be ever in your favor!



Happy Trading,

Speciale Analysis



Anthony and Anna Speciale

About the Author:

Anthony Speciale is a seasoned market analyst with over 13 years of experience trading. Through his platform, Speciale Analysis, he offers in-depth market analysis, interpretation, and expectations designed to help all types of traders, at every skill levels reach their full potential.



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