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Potential & Breakout trading--Technical tips and tricks

Discussion in 'ASX Stock Chat' started by tech/a, Oct 25, 2010.

  1. tech/a

    tech/a No Ordinary Duck

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    One of the best forms of trend following entry signals.
    There is much discussion on both Breakout and Potential breakout threads.

    While there is some good info offered up there are also lots of trading hints which can increase the traders hit rate/return and understanding of these important technical setups.
    Will add my bits over time with examples.

    JOE
    As the two threads most related to this thread are in this section it seems appropriate that this thread also stay here rather than moving to Technical trading ideas---if OK perhaps this could be sticky as the two threads have remained on the front page for years!
    I think chart posting with explanation should be compulsory as well.

    What do you think JOE
     
  2. Joe Blow

    Joe Blow Administrator Staff Member

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    Sounds good to me. Have made this thread a sticky.

    As per your suggestion charts and explanations are compulsory.
     
  3. tech/a

    tech/a No Ordinary Duck

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    If anyone has found a tip or trick that has helped their Breakout trading or finding potentials that are more likely to perform (Could be short or long).

    Please feel free to add to the thread.
     
  4. tech/a

    tech/a No Ordinary Duck

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    BMN performed well today.
    In many ways a copy book technical trade with all conventional signals correlating to a continuation of the set-up.
    Managed to get a parcel at .48c

    So these charts are great examples of a perfect breakout.

    We clearly saw BOTH Buyers overcoming sellers AND Exhaustion of sellers

    Click to expand
     

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  5. tech/a

    tech/a No Ordinary Duck

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    Here is a poor example (currently) in my not so humble opinion.
    Its VOR

    There are very distinct pointers to trades which are likely to continue.
    Trading after 27/9 telegraphed the strong initial breakout and 7/10 is an important bar
    any suggestions as to why?

    Click to expand
     

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  6. tech/a

    tech/a No Ordinary Duck

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    Here is another showing how volume and breakouts don't need to be in the same sentence.
    MANY excellent breakouts occur without huge volume---initially---it may well come--soon.

    In cases like this I would use the High volume bars of 19 and 22nd as my stop area of support.
    Its pretty clear that at these price points sellers were exhausted/absorbed.
     

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  7. Boggo

    Boggo

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    Good idea starting this thread tech/a.

    Below is (to me anyway) a perfect example of when something is going to happen in a favourable way.
    As you can see from the green arrows my scan is designed to find these setups.
    From the ASX 300 I may get 10 to 20 candidates on any night in a bullish market and that is where a quick eyeball of the results usually narrow it down to maybe 2 or 3 to watch.
    Patterns similiar to those at the highlighted area on the SRL chart just stand out like the proverbial at first glance especially when they pop up three days in row.

    Just my :2twocents
     

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  8. tech/a

    tech/a No Ordinary Duck

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    Thanks for the input Boggo.

    Its my intention to look at the Breakout as close to R/T as possible so that we can follow the good----bad and the ugly of the beast.

    As breakouts are a well used entry technique and one of my favorites I think it would be more benificial to follow a breakout so we can see those signs that indicate future direction.
    Perhaps add some commentary up to when the signal has failed (Or more importantly signs that indicate all is not as seen) or perhaps where the signal is screaming more.(again signs which point to an addition to your trade.

    Breakouts are interesting as are potentials as they are at resistance.
    We could also do a thread on swing trading and we would be looking at he same "potential" setups,but with a view of trading it short.

    What I'm hoping we can achieve is a guide to what makes a better setup to the next -----and what indicates a breakout will continue to perform or fail.

    In closing it is my observation that you will have a clear indication of potential success or potential failure within 3-5 bars of the timeframe you are trading. At which time your trade is on its way to profit or stop.
    Will post charts of those in question (Those charts above) to illustrate after todays trading.
     
  9. Boggo

    Boggo

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    These are my two watchlist candidates from last night, EHL (short term breakout today) and IDL (could break through where it was this time last year).

    I initially picked four, the other two were NXS (very wide stop needed) and SDG (erratic volume and needs to be in the 83 to 84 cent area)

    Am interested in in any views or comments on these.

    Below the EHL and IDL charts is a chart of JML, see the similiarity with the chart of SRL in my previous post, they are the ones I jump on at the first sign of the break.

    (click to expand)
     

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  10. tech/a

    tech/a No Ordinary Duck

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    Happy to have a look.
    My current breakout portfolio is AZM BMN DML GXY III JML NXS OZL SAR SEA SRZ BRM

    So some similar held.
     
  11. TheAbyss

    TheAbyss

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  12. Synergy

    Synergy

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    BAU for me ticks a lot of boxes after its strong performance today.

    All initial breaks should be treated with caution until some sort of verification has occured.

    Here there is a long leadup to the break, with a solid base being built in a very thin range - basically trading between 15 and 18c for 3 months. Then there is a progressive volume increase leading up to the initial break. This is followed by a low volume pullback, and a higher volume rise to close above the initial breakout.

    Tech I'd be initerested on your thoughts on BMN after todays move lower.
     

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  13. kennas

    kennas Searching

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    What's the AZM breakout trade? Through 45-50c, bouncing off 60 ish, or through 65, or potential breakout through 75c??
     

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  14. tech/a

    tech/a No Ordinary Duck

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    Holdings Kennas I've had some for a while AZM since sept .
     
  15. Boggo

    Boggo

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    A couple from tonight's scan, I haven't looked closely at these yet so they may get discarded, I will leave it to others to comment in detail.
    Neither of these are my 'ideal' setup.

    MML needs to show a convincing break of of 5.70

    SDM has been battling 2.00, need to get over and show signs of staying over that area.

    (EHL came up again tonight, 3 nights in a row now)

    (click to expand)
     

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  16. kennas

    kennas Searching

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    I sold quite a few AZM at 5c (the bottom), to lock in a capital loss. Lucky to have bought them back at around 10, but sold not much after around 30. ouch. :eek: Never thought they deserved more than about $60 and ounce au. The problem with combining charts with fundamentals. Like with AND. Arghhhhhh.
     
  17. Boggo

    Boggo

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    Probably for an exercise we can track the progress of a pick (WHC) that had a nice close last night and broke out today.

    (click to expand)
     

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  18. So_Cynical

    So_Cynical The Contrarian Averager

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    Hey tech...i hold ILU and have done for a while and im wondering since ILU has been in a fairly prominent up trend for the last few months...how come your not in? did it even appear on your scans? if not i wonder what could of prevented it from showing up? im thinking perhaps something didnt happen :dunno: so didn't tick all your systems boxes.
     
  19. white_crane

    white_crane Jedi Master

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    Excellent thread.

    Some quality info here with nice explanations to match.

    Thanks tech/a and Boggo :xyxthumbs
     
  20. white_crane

    white_crane Jedi Master

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    Here's a chart for UXC, comments welcome.

    Today saw a test on average volume
     

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