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How to Play

The Almighty Breakout


with uncanny accuracy
accuracy

SPAIN presentation
(English version)

Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
Oliver Velez Titles
5 Int’l Best-
Best-Selling Books
written by Oliver Velez,
including Tools and Tactics
Trader,
of the Master Day Trader,
one of the best selling
trading books of all-
all-time.

Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
Accomplishments

Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
Copy of Presentation

To Receive a free copy of this presentation e-mail


breakout@ifundtraders.com

© 2010 版板所有 * iFundTraders.com * (866) 877- 6124 * info@ifundtraders.com


Let’s Look at one tactic that helps my
traders generate wealth like this.

We call it:
The Almighty Breakout
Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
Page 7

Two Main Breakout Facts

Fact 1:
Breakouts are amongst some of
the most powerful, profitable
plays in existence

Fact 2:
72% of all Breakouts Fail
Page 8

Breakout Question 1

Question 1:
So how can breakouts be so
powerful and profitable if most don’t
work?

Answer:
The 28% that do work do so in a
major way. Big Profits!
Page 9

Breakout Question 2
Question 2:
So how can one distinguish between those
breakouts that are likely to fail, versus those
which will likely soar?

Answer:
By the end of this educational session, you’ll
know which breakouts to buy and which to by-
pass.
Page 10

The Traditional Breakout


Traders are
waiting to Buy
Here

iFund Traders Tip:


You need a minimum of three relatively equal highs
and lows to have a true consolidating base.
Page 11

The Traditional Breakout


Our Traders Buy Here

Stop Here
Page 12

The Traditional Breakout

Our Traders Buy Here

Stopped
Out Here

What’s the culprit? What went wrong?


Page 13

The iFund Traders Breakout

Our Traders Buy Here

Our Traders Place a


Stop Here
Page 14

The iFund Traders Breakout


Page 15

iFund Traders Breakout Play (BOP)


PATTERN SETUP
1. The sideways base can occur in an established uptrend or after a downtrend
2. The base should be narrow and thin, not wide and whippy
3. The bars in the base should be small and narrow, no wide range
4. The volume during the base should be light, not heavy
5. The 8ma and/or the 20ma should ideally be rising during the base’s formation

BUY ACTION
1. Buy the bar that breaks above the last 2/3s of the base
2. Place a stop .01 below the breakout bar (the entry bar’s low).
3. Project the length of the base upward for target, if there is no prior reference point.

IMPORTANT POINTS
1. The best breakouts occur at or near the point of contact with the rising 20ma/8ma
2. A iFund Traders buy Set-up at the bottom of a base can be an early buy opportunity
for the watchful trader, if the VBS is occurring at or the rising moving average.
3. We play BOPs more on 2- and 5-minute charts when scalping
4. A Pause (Base) VS a Top – When a Base Is a Top and not a Pause:
a. Pauses (bases) are narrow; Tops are wide and whippy
b. Pauses (bases) have small bars; Tops have big wide range bars
c. Pauses (bases) have light volume; Tops have big volume
d. Pauses “usually” don’t cross the 20ma by much; Tops cross below it.
Page 16

iFund Traders Breakout Play (BOP)

iFund Traders Breakout Play – This buy tactic will be the iFund Traders second most frequently
traded event. On many days, it will be the only pattern traded, as stocks tend to spend the majority
of their intra-day time drifting sideways in bases. Therefore, this is a tactic that must be mastered..
b
Tip Top
a
Buy
Alert Buy

Higher lows
iFund Traders Tip
The second move, after a normal
dip, will often be the biggest one.
Volume Decline

Pattern Set-up
Buy Action
Trading Note: Bases that are tight and narrow with declining volume, rising lows and a rising 8ma and/or
20ma produce the highest odds of exploding to the upside, once they clear the over head resistance. Keep in
mind that these “pauses” are not negative, despite the apparent loss of momentum. They simply serve as pit
stops on the way to higher ground. In essence, they give the stock the ability to rest and rejuvenate before
another big advance begins. The iFund Traders Breakout Play is a staple amongst our traders.
Page 17

Breakout Play (BOP)


Don’t’ buy above this high
Buy Here

Last 2/3s

iFund Traders Main Breakout Rule


“Buy the bar the clears the last 2/3s of the base.”
Buying the break to a new high is often too late.

Chart Courtesy of iFund Traders Pro™


Page 18

5-min Breakout Play (BOP)


What should you be getting ready to do right now?

20ma

200ma

A tight sideways pause (time consolidation) into a rising 20ma will tend to blast off right at or near the point of the
contact with the r20ma. If the price were to go beyond the 20ma, and the 20ma were to go flat, the odds increase that
the base is a stage 3, not a pause.
Chart Courtesy of Realtick®
A Testimonial
Page 20

Breakout Play (BOP)

Buy

Stop
Page 21

Daily Breakout Play

Buy Here

Chart Courtesy of Realtick®


Page 22

Breakout Play (BOP)

Tip: The best breakouts (BOPs) occur at or near the


point of contact with the rising 20ma. See circle

Buy

Stop

Chart Courtesy of iFund Traders Pro™


Page 23

Breakout Play (BOP)

iFund Traders BOP Criteria


Page 24

Breakout @ 8ma

Buy Break Here

Charts Courtesy of iFund Traders Pro®


Page 25

Breakout Play (BOP)

Buy BOP Here

Buy BOP Here

Buy BOP Here

Stop Here

Charts Courtesy of iFund Traders Pro®


A Testimonial
Page 27

Breakout Play (BOP)

Sell at the start of the next bar

Buy Here
Page 28

Breakout Play (BOP)

Buy Here
Buy Here

Stop Here

Charts Courtesy of iFund Traders Pro®


Page 29

Breakout Play (BOP)

True Breakouts usually offer the iFund Trader two buy


opportunities:
1- The Initial Break away move
2 – The first pullback (VBS)

Charts Courtesy of iFund Traders Pro®


Page 30

5-min Breakout Play (BOP)

Target Area
200ma

Buy here
Buy Here

S
20ma

Tight sideways patterns above the 20ma during midday doldrums often
lead to breakouts that run to overhead resistance points, such as the
200ma. Chart Courtesy of Realtick®
Page 31

Breakout Play (BOP)

iFund Traders Tip:

Buy Buy VBS


Breakout

Charts Courtesy of iFund Traders Pro®


A Testimonial
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A Testimonial
Here Is A Simple Question

Copyright © 2010 * iFundTraders, LLC. * 2576 Broadway, #158, NY, NY, 10025
A Simple Question
If I gave you:
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
1) Buy every BEAKOUT that occurs;
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
1) Buy every Bull Elephant Bar that occurs;
2) Place a stop under the breakout bar’s low;
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
1) Buy every Bull Elephant Bar that occurs;
2) Place a stop under the breakout bar’s low;
3) Keep 80% of the gains on all winning plays;
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
1) Buy every BREAKOUT that occurs;
2) Place a stop under the breakout bar’s low;
3) Keep 80% of the gains;
4) I will eat the losses (until you’re profitable);
A Simple Question
If I gave you:
1) $75,000 to trade (to start);
2) A list of only 100 key stocks to focus on;
3) A commission rate of 6 cents per 100 shares;
And told you to:
1) Buy every Bull Elephant Bar that occurs;
2) Place a stop under the breakout bar’s low;
3) Keep 80% of the gains;
4) I will eat the losses (until you’re profitable)

Do you think you could do it?


Another Question

Then Why Don’t You?


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