Trading breakouts

Quote from jack hershey:

First of all, I feel that there are many other more profitables scenarios for doing trades at other times of market activity. The breakout trade you are using as an edge only occurs every so often.

The KISS for entry, then exit:

1. Draw the container of the instrument. Generically this is a channel.

2. As price approaches the LTL, assure yourself that there is a geomtry available for the BO of the left trend line to be handled as an ACCERATION of the price movement within the contraints of the channel. That is on the opposite ends of the prior bar and the bar of the potential BO, a line may be drawn that is steeper, trendwise than already exists. Draw it before the BO as a RTL and also draw the LTL from the prior bar opposite end. Note that relative volume is increasing as well.

3. If 2. is possible and done then enter upon the BO value. BO is your invention as a signal.

4. Monitor the current price and assure it remains beyond the BO value at close. Scope this offset in as a line sloped at the angle of the prior LTL and from the extreme end of the BO bar. This region is the "zone".

5. A new bar begins and "translation" is maintained. Hold as the new bars fill the accelerated container (parallelogram).

6. Note the continuing advancement of the steeper trend and volume increasing.

7. Note the newer bars reach the LTL or nearly so and the bar to bar overlap is not getting greater. Hold.

8. Note volume continues to increase.

9. After peaking volume (PRV it 12 or more seconds into the forming bar), you will be exiting as a second chance. The BO is over.

10. After the maximim excursion the bar will be on the accelerated RTL.

11. The bar will pass through the RTL as sentiment has changed. It could be, geometrically below your entry.

BO trading the LTL occurs not too often. You can get into any potential BO trade much earlier anyway as has been pointed out. Look at the channel you constructed. Either of the two points of the channel (forming the RTL) are a better beginning point. ALL BO's happen AFTER the channel can be drawn.

By steps 7, 8 and 9, you are in the exit territory. Here it is valuable to have a leading indicator of the price you are trading. There are many.

For SCT traders this is a VE situation and you are simply accelerating the sub 3 of a BBT ordinarily on the way to an FTT. The sub extends to the LTL and a VE occurs. You accelerate the sub container when possible. All VE's are exited when the close is not in the Zone (do the exit by a spike analysis). This is an FBO in the old lingo. Ordinarily you are in the trade from pt 3 on the original RTL. NB. IF close is in the zone, then a M1 and M2 will occur and the FTT is at the end of the M2.
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But what if the QR9 breaks through the NF5? Do you go long when WI pulls back to trapezoid*6? What if your stochastics havent made a full RollOverUpToLeftReversal to the DNHS dashed line? Classic Y8TG situation no?
 
just a humble request -please dont copy and paste Jack hershey's posts Puhhhhhhhleeease
you can use "quote" and then type blah blah blah--same effect
 
Quote from jack hershey:

Here is an ilustration from today (13JAN10) on bars 24 through 26 of the ES.

As I prefaced in my prior post, there are other things going on most of the time that surround this trade.
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You are an idiot.
Stop confusing and misleading newbies.
 
to OP
good strategy is to take overall market into consideration, even though Breakouts are occuring now-look at BIDU PSA BDK and some on charts I posted, this is after the overall market has run up quite a bit so increased chance of false breakout or breakout failure. Sometimes it might seem counter intuitive but when market pulled back recently and didnt really crumble like 2008 that when you start looking for breakouts so that when overall market has updays your breakout can go up and stay away from your worrypoint.

The better the base the better the breakout imo. If breakout starts meandering right after breaking out high chance of failure. If it consolidates after a significant move then its possible it will continue. After all that its all still random :D :D :D Isnt that easy ?
Best thing is to take 1/2 off where you think its stalling and let rest ride with breakeven stop and more it moves in your favor keep moving stop. You can goto Davelandry.com and checkout some of his videos. That should get you started somewhere.

Checkout LMT above $80
 
Quote from GG1972:



Checkout LMT above $80
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dont buy 80, thats a suckers play. wait for the retrace. Everyone knows newbs buy at the breakout highs..wait for a pullback.
 
Quote from konviction:

dont buy 80, thats a suckers play. wait for the retrace. Everyone knows newbs buy at the breakout highs..wait for a pullback.
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I like to buy half my position on a breakout, and half on the retrace, if there is one. If you don't enter at 80 you take the risk that there won't be a pullback. I've been burned too many times waiting for that pullback that doesn't retrace anywhere near the breakout price.
 
Quote from HolyGrail:

I like to buy half my position on a breakout, and half on the retrace, if there is one. If you don't enter at 80 you take the risk that there won't be a pullback. I've been burned too many times waiting for that pullback that doesn't retrace anywhere near the breakout price.
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yes, but out of 10 stocks, how many are strong enough to rocket up after a break out?..not many. When you have a breakout from the downside, you have a lot of people that are looking to get short on your "breakout"..this is why so many fail...and thats why i wait for the retrace. Not only is it a safer play, but you also buy cheaper, and your stops generally tigher as well.
 
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