I always find that its better to have more than one reason to enter a trade. Trades enter "only" because of a breakout are much less successful than others. If you have it breaking out and also having that breakout setup something else your odds are much better, probably 70% + are going to be profitable. You can find 3 to 4 of these every day. Brandon
If you dont "Keep it simple", your success rate will falter. TIWI = Heavy volume " at resistance" as poster Chris suggested. It's that simple. mktman
I like to look for many things to help confirm breakouts, I like to see at least a couple in my favor at an entry: a) a simplistic one that many beginners use is to scan for volume+ at breakout (that's a chart-specific indicator) Example: I like to see 20-30% higher volume bars in the most recent 2-3 minutes prior to the entry, to volume-confirm a trigger. But more important, is Also correctly integrating market internals, at the specific time of breakout such as: b) "is the stock a member of one of the 2-3 strongest-moving sectors" at time of entry? c) is TRIN favorable, eg >1.5 for shorts or <.7 for longs, or is it chopping near 1.0 range? d) are the eminis in the process of taking out at least a new high of day / low of day, in the direction of the breakout? Other 'false breakout' antidotes include: -time and sales #1: tape reading, eg is the tape increasing in speed at the entry? (one of my favorites) -time and sales #2: is average share size increasing in size at the entry? -time and sales #3: how fast does the price move through each spread, and through each .10 increment, as a breakout trigger is reached? -ADX confirmation? ADX > 40 at entry? -time of day pattern - eg entering at typical pivot times like 10am? -length of time in trade - how long is it given to 'work out' and how close are your trailing stops? many other things are there to look for. ... best wishes! In time you learn to quickly spot these things, look for as many in favor to tip the balance into a successful breakout entry, and put on the trade. ken
I find that the solution to trading breakouts, is to look at the larger trend and make sure the break is occuring in the direction of that trend. This is a core part of my system. Trading breakouts when the big trend is neutral or against you, is, in my opinion, suicide. The other thing RE: breakouts, keep your risk tight. Need atleast 2:1 reward/risk even when trading with the trend. You will get strings of losers. There is a final component that I have added to my system to maximize the potential of a given trade, but I'm keeping it to myself . I think the above should be a good start along with other suggestions here. Goodluck,