Hi Digs,
"The rules I try are enter market at 0.01 after critical price zone, like 20.26 or 20.01 or 25.51, with a stop order. Using 2 min bar chart, if the breakout bar or the following bar after breakout bar smashes down to the break price, say price entry was 20.01, and filled for 1000 shares at 20.05, then price smashes down to 19.95 immediately then I will exit the trade as there is no Break out holding price at the new levels. And try to re enter trade if price makes a new high.
The problem with this that when it smashes down far to quickly your losses can be more that expected, and one never has enough time to enter protective stop losses orders."
Have you tried using a level 2 screen to assess depth of market. By taking a look at this just prior to taking the trade, it can sometimes give you an idea of what price you are likely to get if your trade does not work out and you have to bail quickly. If there is very little depth available then its best to skip the trade even if it sets up perfectly.
Level 2 is no longer as simple as learning to read the Ax and following him, although this can sometimes work particularly is smaller cap stocks. However it is still very usefully for accessing DOM and only taking trades where there is a very good chance of getting out at a reasonable price if you have to.
