Why people buy breakouts

This is why i tend to play a solo act opposed to posting on the ET forums. They turn into a bash fest and frankly i dont like to be part of them. First of all everything is relative. I should have clarified the time frame when i made this post. Sure we are in a bull market since 2003, but thats on a much more grand picture than what I am talking about.

I am thinking on a more micro scale that will keep you in a trade for anywhere from 15 minutes to 2 days depending on the trend.

I agree that trading is an artform and not a science.

I have no bull or bear bias unlike the ET permabulls.

If you have nothing good to contribute then please stop posting in this thread.
 
Quote from Pa(b)st Prime:

That's why you need knowledge edge. You need to know odds. You need to know inter market relationships. You need to relax and seek flow.

More...

Pa(b)st

You rule!!!

Tell 'em straight.

Always appreciated like the sound of an iceberg cracking just as your order is filled.


Clean up on aisle 10 please.
 
Quote from bigbrent701:

ET should require a literacy test before people are allowed to post here. Pa clearly missed the entire point of my post.
More...

No what is incredible is that you got some bona fide honest truth and you take it the wrong way.


As my pappy would say "wouldn't know an opportunity if it hit him in the head."
 
FYI

although slightly off-topic (from Murphy's Intermarket TA 1991)

1. All markets are interrelated.
2. No market moves in isolation.
3. Chart action in related markets should be taken into consideration.
4. Technical analysis is the preferred vehicle for intermarket work.
5. Intermarket analysis adds a new dimension to (market) analysis.
6. The four key sectors are currencies, commodities, bonds and stocks.
7. The U.S. dollar usually trends in the opposite direction of the gold market.
8. The U.S. dollar usually trends in the opposite direction of the CRB index.
9. Gold leads turns in the CRB Index in the same direction.
10. The CRB Index normally trends in the opposite direction of the bond market.
11. Bonds normally trend in the same direction as the stock market.
12. Bonds lead turns in the stock market.
13. The Dow Utilities follow the bond market and lead stocks.
14. The U.S. bond and stock markets are linked to global markets.
15. Some stock groups (such as oil, gold mining, copper and interest-sensitive stocks) are influenced by related futures markets.
 
Quote from kowboy:


I find the hardest part of trading breakouts is to find enough stocks (based on the daily charts) to put on the watch list as potential breakouts. Most of the time, with only a handful of candidates, the trader ends up spending all day or several days waiting for one of these to breakout and confirm. I've not found a good scanning method for my own use and only several websites to get more than a handful of candidates at any one time.

Thanks [/B]
More...



Yeah, thats why you need to switch to trading emini futures. Listen I have been swing trading stocks for over seven years now. And I know exactly what you mean by waiting days on days in looking for potential stocks and breakouts. It really drags on you after a while. Like looking for a needle in a haystack. And then the fact that every night going thru hundrends of stock charts and reading fundamentals about a stock til your face turns blue.
At first its exciting to try to put the pieces of the puzzle together. Spending so much time gives you a feeling that you are a detective doing your DD and realizing it will payoff. But once you investigate other financial instruments your eyes get open and you realize their are better and more appealing ways to make money.

Thats why in the last month I have found the emini futures and am trading the YM on a intra day basis.
Trust me once you try it you will NEVER want to go back to trading stocks. IMHO :)


Sure there is risk involved with futures but in my experience swing trading stocks with overnight exposure is soooooooooooooooooooooo much more riskier. I can attest to this just last month when I stupidly held NTRI after the Bell closed. The thing is I thought my risk was mitigated because they werent going to CC their earnings report until 2 weeks away.
But they decided to prewarn guidance that day out of nowhere. And BOOM, I was down 8 points at 4:05 pm. :(

I know there is alot of competition in eminis but if you are patient enough and start out very small I believe it can be the way to go for many traders !!

Right now I am trading 1 contract of YM for at least 3 months. I may add another one by Summer. Mainly using three strategies that have been working pretty good.

I fad the premarket Gaps.

I also use candlesstick charting on the 1 minute and five minute charts trading Hammers, Dojis, and engulfing patterns, (with stochastics at bottom to confirm entry points),

And finally I trade using a 9day ema and 18day ema crossover with OBV used to make entry points clearer. And BB which is used as an exit tool indicator. This strategy is more for following the basic Trend of the YM for the day than the other two above.


Anyway, I wish I had been more involved with futures earlier. And learned more about them before now.
 
Quote from cashmoney69:

What would you say has the highest win strategy if not break outs?
More...
For intraday trading: countertrend strategies
Swing trading (3 to 30 days): trend following strategies
 
Quote from marketsurfer:
people buy breakouts because its easy. the exact same reason people do most things. easy does not cut it in this game or life.
regards,
surf
More...
Of course. They're easy to "spot", and all you need is a stop order just outside of the current trading zone. What's cool about this, especially in the emini futures market, is that if you are astute, you can tell if a breakout has "legs" or not. Many breakouts on high, high volume and multiple point moves, end-up as shake-out events and don't last for more than a minute or two...they become "short-circuited". Alan Farley first observed this and added it to his book of trading rules. I've seen it many, MANY times in the eRL mini futures. More orderly break-outs seem to sustain themselves...watching that first pullback action after the break is "key"....in determining whether or not to STAY in or Get back in or add to an existing position. Usually, volume dries-up a bit on the first pullback and that is a good sign.
 
this has been a pretty good thread so far.. im on here to learn so im more of a listener than a contributor, but...

i think trading breakouts with emini futures, going long or short is WHERE ITS AT (for me)

i want to learn how to reverse my trade if its a fake-out, is this done by watching the first pullback and entering on some other break?
 
You must log in or register to reply here.
Back
Top