Further to Kenna's post in "Outstanding Breakouts"
I thought that as Boggo had pointed out it was timely that we perhaps discuss what an Outstanding Breakout actually is and
More Importantly How best to trade them.
Below are SOME of my breakout trading "secrets" Ive traded breakouts for years and trade 2 types.
The conventional which is being discussed here (Price Breakouts,either supported or not by volume).
And the Non Conventional (Volume breakouts either supported or not supported by range.)
My definition of an outstanding breakout is one which is supported by obvious corroborative evidence before the breakout which is confirmed by the breakout itself. Often we see this evidence but nothing comes of it.
Often we will see breakouts without much or any of such evidence.
So what is this evidence.
(1) Price must breakout of something,a trend break,or a consolidation.(Not the case for Volume Breakouts---seperate topic)
(2) A gap out of the consolidation or in an opposite direction is preferable.
(3) There must be a confirmation in volume and NOT necessarily on the breakout bar,but it must either (Volume) herald an exhaustive move in a direction or an absorption of selling (Often a volume breakout in its own right).
Chart is BLY click to expand.
I hold BLY but have been trading a lot of this move in a 60 min timeframe--havent grabbed it all but a good bit from 31/7.
This is a good illustration.
I put this here because its close to the "Breakout threads"