Breakout trading

Beginner Questions Candlesticks, Chart Patterns, and Price Action
1

Could you provide some breakout trading tips based on your experience?

2

What you need is right here, Ranjith :wink:

2 Likes
3

Personally, I haven’t had the chance to successfully trade breakouts. :sweat_smile: Either I’m too eager or I’m too late. But if I would give a tip, it’s to use indicators and try to look for a system that will help you spot these breakouts more efficiently. :sweat_smile:

The whole Grade 11 section on the school here (beginning with the lesson shared by Jane here) dives into the details for this. :blush: But it might also be helpful if you demo trade while you’re checking out the “theories” behind trading breakouts. :smiley: If you don’t mind, are you currently demo trading? :blush:

6

Is this the simplest ever break-out pattern? -
Larry Williams’ Smash Day?

Bullish -
Look for a daily bar with a Close lower than the previous day’s Low.
Set a buy order at today’s High.

2 Likes
7

Probably. There’s a slightly similar one by Walter Peters (of “Naked Forex” fame), but his uses an indicator as well.

How are you getting on with “Smash Day”?

8

It is definitely good fun to see the entry at breakfast time and bank the profits at tea-time.

But holding multiple days is better.

Win rate is ridiculously high, though most entry orders are not triggered the next day. I find it’s valid to leave the entry order pending for say three days.

1 Like
9

It makes you wonder (by which, of course, I mean that it makes me wonder!) what the win-rate and especially the profit factor would be, if you tried doing this from faster, constant-volume charts with a very low R (maybe 0.2???). I feel a little research project coming on … :nerd_face:

1 Like
10

Focus on strong price movements that surpass resistance or support levels, and always set tight stop-losses to minimize risks.

11
  • Identify strong support/resistance levels
  • Wait for confirmation
  • Use appropriate stop-loss orders
  • Consider volatility
  • Combine with other indicators
  • Beware of false breakouts
1 Like
12

thanks for sharing the link, really help

13

Identify Key Levels: Look for significant support and resistance levels on your charts where price has previously struggled to break through.