A sample PA setup

Attached is a chart which i will use to explain one of the PA setups.

Attached is a 5M chart with the 1H MM level plotted on it. One of the basic things to understand is that for a true break of a SR to happen, the bar which breaks it should have a higher spread than the ones around it. This is true 85% of the time and the logic behind that is simple. A resistance level is the level where we have a lot of sellers. So, in order to break thru this level, a lot of buyers need to be there to absorb all this selling and when they do buy a lot, they push the price higher than normal. So, in this chart, u can see that the bar which broke thru the resistance has a bigger spread than others. This confirms the break.

You can also see that after the break, the price runs away for 2 bars and then retraces back to the nearest support. This happens 80% of the time and this retracement back to the support confirms the break and provides us with an opportunity to get in long with a very small SL. As you can see, after the break, the retracement happens and after the retracement, the price simply runs away.