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Breakout Trading Filters

And the news which excited CWK participants on the 9/12/2010 (blue very high vol. bar)

Tricky thing with news related spikes is whether it follows through. Some do some don't.
 
To those newer traders interested in material on breakout trading

I recently downloaded Mcgrath-Hill "Encyclopedia of Trading Strategies" as a free Torrent .pdf file

Chapter 5 covers Breakout Trading strategies. Pages 83-108

For some reason, the date of publication I could not see, but it does cover AI and neural networks in later chapters, so is fairly up-to-date.

I think this title has been previously recomended by others
 
One of my very favorites you wont find in books. Its one I believe I have been the first to develop.
Tech/A I also really appreciate your sharing of knowledge so could you tell me what you believe will happen following the bar after high volume please.
 

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Wsywig

This looks strong The bar of volume remains in control until trading below its low occurs.
We have an inside day shown.
This would be a trade setup for me.
I would be placing a trade like this.



How did it pan out?
 
This looks strong The bar of volume remains in control until trading below its low occurs.
How did it pan out?
Oh it's one I'm in at present opened at 33.5 c on that high volume bar. Surprisingly going against the market trend.
 

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Tech, would you be able to explain why this one look strong? Is it mainly because it didn't go below the control bar? What are the other reasons?
Cheers
 
This is my current filer

Filter = ((Cross(C,Ref(HHV(C,40),-1)) AND C>O AND H>MA(C,40)) OR (Cross(Ref(LLV(C,40),-1),C) AND C<O AND L<MA(C,40)))
AND C < 7
AND MA(V*C,10) > 500000;

AddColumn (C,"Close");
AddColumn (V,"Volume");
AddColumn (V*C,"Liquidity");

So
- Crossing above the HH of last 40 days AND close greater than open AND the high being greater than the 40 day moving average
OR
- Crossing below the LL of last 40 days AND close is less than open AND the low is less than the 40 day moving average
- Closing price less than $7.00
- Liquidity > 500,000


At the moment I am simply running this scan on the All Ords each night. I then also run it for the previous 3 days to see if there has been any confirmation of a breakout/move.

I am looking to create a couple more scans to see what works best. Does anyone have any opinions on this? Maybe ones to identify potential breakouts rather than actual breakouts? (or maybe patterns following breakouts)
Any help at all is much appreciated.

Also is having the Close< $7.00 on my current scan too restrictive? I am trying to trade stocks with reasonable volatility to make the most of the breakouts. Should I change this part of my formula?
 
Tech, would you be able to explain why this one look strong? Is it mainly because it didn't go below the control bar? What are the other reasons?
Cheers

Will later when more time but did you notice this!!!! during the trade??
 

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Look at breakouts on LOWER than average volume.
This indicates supply at this level (Normally a highest high for sometime) isn't coming into the market.


Something worth noting about breakouts.
 
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