Professional Documents
Culture Documents
Boucher, Mark - How To Use Volume and Technicals To Improve Reliability and Profitability of Breakouts (Trading Strategies) (Tradingmarkets) PDF
Boucher, Mark - How To Use Volume and Technicals To Improve Reliability and Profitability of Breakouts (Trading Strategies) (Tradingmarkets) PDF
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):
Figure 3.
The larger the number of these that confirm a breakout in price, the more likely
that you've got a breakout that will move in the desired direction. In addition,
most of the very strongest moves following breakout are accompanied by at least
3/5 of these characteristics.
While these confirmation tools will help you trade any type of breakout, they work
particularly well on high RS high EPS stocks breaking out to new highs, such as
those we trade and those O'Neil trades. So before you get too excited about a
four-week-plus flag or cup-and-handle breakout in a strong RS and EPS stock in
a leading group, check these five features and be sure you have at least one of
these in your favor, and preferably two or more.