PNRA, again there was profit taking the next day. notice the fibs an the 50% level we can to rest on.
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Breakouts
- Thread starter cashmoney69
- Start date
cashman
Breakouts are how "RUNS" start so must be focused upon as you state. In my experience the "KEY" concern for breakout traders is about the follow through once some LOSS STOPS and or entry Stops have been exhausted. Once the actual breakout occurs, which everyone can see if paying attention then the focus shifts to price momentum...............is the breskout just getting a few stops and petering out or is it drawing in new price followers?
That question looks to be easily answered just by obeserving price action..............if it was that easy, HA. The bugaboo comes when price settles back maybe to the breakout point and even back a little more and BOOM...........price jumps back to breakout direction and runs a fast 5 handles and you are not onboard.
The way i prefer to handle that situation is with a "HOOK", if price goes past the high/low of the original breakout before it settles back thats your clue to jump on board if not still in. Your STOP LOSS can then be a tick below/above the price setbacks low or high before it went back in original direction.
Breakout failure STOPS are usually no big deal because you are at an inflection point of a move.
Trading AFTER breakouts is where the real fun begins. Say you get a good 8 handle run and are looking foir more. What to do when price sets back as often as price will set back.
The decision you MUST make is do i stay in and give some profits back or take your profits and retime the move for a continuation? Either way you are making a decision and the next decision is HOW much am i willing to give back if i stay in?
The SIZE of the setbacks for what you are trading will give you a clue, the size of your LOSS STOPS if you ride the profit out without a trailing stop must be wide enough to handle more than the average setback. That can eat most profits away so your profits are always at risk unless you ring the register. Some traders like to stay in and ride out setbacks and others can not handle the heat. Personally i like to ring the register because after two women flew the coup i am not comfortable thinking long term relationships. (just kidding)
LOSS STOPS must be wide enough in trading index futures to avoid the noise and this past 18 months, those LOSS STOPS needing to be wide can get rather hairy to say the least.
STILL, breakout trading is where the profits are.
PS: I am talking 5 minute charts. 100% daytrader
Breakouts are how "RUNS" start so must be focused upon as you state. In my experience the "KEY" concern for breakout traders is about the follow through once some LOSS STOPS and or entry Stops have been exhausted. Once the actual breakout occurs, which everyone can see if paying attention then the focus shifts to price momentum...............is the breskout just getting a few stops and petering out or is it drawing in new price followers?
That question looks to be easily answered just by obeserving price action..............if it was that easy, HA. The bugaboo comes when price settles back maybe to the breakout point and even back a little more and BOOM...........price jumps back to breakout direction and runs a fast 5 handles and you are not onboard.
The way i prefer to handle that situation is with a "HOOK", if price goes past the high/low of the original breakout before it settles back thats your clue to jump on board if not still in. Your STOP LOSS can then be a tick below/above the price setbacks low or high before it went back in original direction.
Breakout failure STOPS are usually no big deal because you are at an inflection point of a move.
Trading AFTER breakouts is where the real fun begins. Say you get a good 8 handle run and are looking foir more. What to do when price sets back as often as price will set back.
The decision you MUST make is do i stay in and give some profits back or take your profits and retime the move for a continuation? Either way you are making a decision and the next decision is HOW much am i willing to give back if i stay in?
The SIZE of the setbacks for what you are trading will give you a clue, the size of your LOSS STOPS if you ride the profit out without a trailing stop must be wide enough to handle more than the average setback. That can eat most profits away so your profits are always at risk unless you ring the register. Some traders like to stay in and ride out setbacks and others can not handle the heat. Personally i like to ring the register because after two women flew the coup i am not comfortable thinking long term relationships. (just kidding)
LOSS STOPS must be wide enough in trading index futures to avoid the noise and this past 18 months, those LOSS STOPS needing to be wide can get rather hairy to say the least.
STILL, breakout trading is where the profits are.
PS: I am talking 5 minute charts. 100% daytrader
UTHR. After a 12pt gap down, and a strong move to try and fill
this gap, UTHR, may be near the end of its rally. A negative
divergence has also been forming for some time now, but not
sure if taking this short off the daily is jumping the gun. A 50%
retrace would yield about 10 to 12pts - A very attractive trade.
this gap, UTHR, may be near the end of its rally. A negative
divergence has also been forming for some time now, but not
sure if taking this short off the daily is jumping the gun. A 50%
retrace would yield about 10 to 12pts - A very attractive trade.
Attachments
UTHR broke out to the down side. Short from 71.10
channels and triangles are nice, but mainlyi just look at the more recent TL. I consider gaps a type of breakout as they rise above/below the current trend.
cm69
cm69