tailieunhanh - How To Use Volume And Technicals To Improve Reliability And Profitability Of Breakouts

If you're going to be buying breakouts of four-week-plus flags or five-week-plus cup-and-handles, you need to know all the variables that can help you improve the percentage of these trades that are profitable and/or can help you highlight stocks that have a higher likelihood of moving substantially higher following a breakout. | How To Use Volume And Technicals To Improve Reliability And Profitability Of Breakouts By Mark Boucher Investors following a strategy similar to the one I teach here at as well as those who follow an O Neil type strategy are apt to be buying breakouts to new highs frequently. If you re going to be buying breakouts of four-week-plus flags or five-week-plus cup-and-handles you need to know all the variables that can help you improve the percentage of these trades that are profitable and or can help you highlight stocks that have a higher likelihood of moving substantially higher following a breakout. Fortunately there are a number of technicals that can help a trader in this regard. This month we ll cover five technical tools that our research shows help increase the reliability of a breakout moving in the intended direction. By putting as many of these as possible together traders can substantially improve their odds of success in trading breakouts of any kind. Here are the top five things we look for on a breakout to help confirm that a substantial move is in the making in order of importance 1. Breakout day closes over pivot resistance and occurs on a TBBLBG. The most important variable is the price action made on the day of a breakout. TBBLBG stands for Thrust Breakout Breakaway Lap or Breakaway Gap. The day of the breakout a new four-plus week high in price should make one of these three runaway price action patterns. These patterns are described in my 10-week trading course. For a quick review a Thrust is a large-range day where the close is in the top third of the range which occurs on volume higher than the previous day. A Lap up is a day where today s low is greater than yesterday s close. A Gap up is a day where today s low is greater than yesterday s high. See Figure 1. Figure 1. 2. Breakout-day closes over pivot resistance and occurs on strong volume 20 over 50-day MA or near record volume since the trading range began. The second most

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