and what about this?
Trading breakouts
- Thread starter gifropan
- Start date
I wouldnt call that a breakout--if you want a pattern checkout the mid nov high--then it goes lower but makes a higher low then comes back to take out mid nov highs thats classic--thats what s happening with lots of stocks like AMZN right now
From about 26.50 goes almost vertical to 33 area
Hey folks,
There's many different types of breakouts (e.g. swing points, consolidation (range), contraction, trend continuation, trend reversal, retracement, s/r levels, trendline et cetera). They all have their strengths and weakness. The commonality between the different types...volume expansion or volatility expansion (there's a difference between the two) and the trade is taken in the direction of the breakout...into the direction of strength of the breakout.
However, that doesn't imply the strength will remain after entry.
In addition, I strongly believe that one of the main reasons why most traders have so much difficulty with trading breakouts is that they are trading different types instead of concentrating on one type until they master it. Another reason for the difficulty is that they don't even know what type of breakout their using or they're unable to define it.
By the way, there are those that FADE the breakout or wait for a trend reversal price action soon after a the breakout to take a trade in the opposite direction of the breakout. Yet, just as important for those that trade breakouts to know what type their trading and to understand it...those FADING breakouts need to know what types of breakouts they're fading and to understand it.
Last of all, a few of those charts by konviction that he identifies a prior breakout and then waits for price to retrace back through the breakout point...that's very similar to FADING although a trader that's fading a breakout will most likely be in the trade a little earlier in comparison.
Mark
There's many different types of breakouts (e.g. swing points, consolidation (range), contraction, trend continuation, trend reversal, retracement, s/r levels, trendline et cetera). They all have their strengths and weakness. The commonality between the different types...volume expansion or volatility expansion (there's a difference between the two) and the trade is taken in the direction of the breakout...into the direction of strength of the breakout.
However, that doesn't imply the strength will remain after entry.
In addition, I strongly believe that one of the main reasons why most traders have so much difficulty with trading breakouts is that they are trading different types instead of concentrating on one type until they master it. Another reason for the difficulty is that they don't even know what type of breakout their using or they're unable to define it.
By the way, there are those that FADE the breakout or wait for a trend reversal price action soon after a the breakout to take a trade in the opposite direction of the breakout. Yet, just as important for those that trade breakouts to know what type their trading and to understand it...those FADING breakouts need to know what types of breakouts they're fading and to understand it.
Last of all, a few of those charts by konviction that he identifies a prior breakout and then waits for price to retrace back through the breakout point...that's very similar to FADING although a trader that's fading a breakout will most likely be in the trade a little earlier in comparison.
Mark
In simplicity a breakout is price starting to go in the opposite direction to the previous direction and subsequently sustaining that new direction. So the only concern is that you want to be going with the new direction.
A BO identification needs to distinguish itself from a retracement. In micro trading the day in a volatile and liquid futures market, take an example of downward price finishing and an upward direction starting. On a fairly fast chart you can note the lower highs and lower lows progressing. When that pattern is breached to the upside your new direction is in place.
A BO identification needs to distinguish itself from a retracement. In micro trading the day in a volatile and liquid futures market, take an example of downward price finishing and an upward direction starting. On a fairly fast chart you can note the lower highs and lower lows progressing. When that pattern is breached to the upside your new direction is in place.
looks like wynn is on its way to a breakout too. Picked up small size at 72.4
http://stockcharts.com/h-sc/ui?s=WYNN&p=D&yr=0&mn=7&dy=0&id=p97892034007
http://stockcharts.com/h-sc/ui?s=WYNN&p=D&yr=0&mn=7&dy=0&id=p97892034007