What to watch for in a possible breakout?

[mrormmy]

Now I am new to this and not posted anything before. I have sat back and read so much from everyone and been doing my own thing. But now after watching, and trading in silence. I thought I would ask what does others look for to invest in a possible breakout?

I mostly use trends and volume, in the company it self and in their market. I also look at what’s going on in the company, but yet to find a concrete method that I stick to.

For instance on my current high interest list is

LKO AND OSH.

LKO due – volume, price, history and current activity + they are holding through this week a hell of a lot better then the market. Thus I am interested.

I know everyone will have their own idea what to do, but want to start to understand others views - systems.

 

[sinner]

In my view, there is not much more you need to know than this (when it comes to trading stocks breakouts). Master these setups and you will be raking it in. ASX 20 is probably all you need to check EOD.

 

[caribean]

Hi, I'm not an expert at trading stocks, but IMO you need some sort of consolidation, right before a breakout.
I would not enter a breakout of an already extended run, long or short, again, just IMO.
If you want examples I'll try to find some stock charts, though i think the stock traders here can provide some.

 

[Tradesurfer]

On a lot of trading programs you can set up price channels so you can see when price makes say a new X day high or low.

Agree with the previous comments around consolidation and low volatility before a breakout seems to be indicative of some of the better ones. Periods where it trades in a tight range and then with strong volume price breaks out above the range.

A good book that talks about using something simple like this is the complete turtle trader. They used new 20 day high, new 10 day low for getting in and out. Also cover initial stop area etc.

http://www.amazon.com/gp/product/00...mp=1789&creative=9325&creativeASIN=0061241709

 

[It's Snake Pliskin]

Breakout entries

Just interested in the strategy of trading breakouts and why the strategy is employed by beginners or advanced people alike.

Points to consider in the discussion:
failed breaks
gaps
volume
time for a break to hold
background leading to a break
news
impetuousness
beliefs

Feel free to opine away.

 

[Fishbulb]

In my view, there is not much more you need to know than this (when it comes to trading stocks breakouts). Master these setups and you will be raking it in. ASX 20 is probably all you need to check EOD.

Do you use this system exclusively?

Thanks

 

[brty]

Sinner,

there is not much more you need to know

Just add one more little thingy and you have yourself an edge.

Actually I add two little thingy's, one being following the major direction of the market, seems to add mightily to the percentage of correct trades, but cuts down the number of opportunities.

brty