I like to look for new highs. That’s it. Simple. Easy to follow. Once we have new highs I like to see if volume is coming in. To me it’s important to note the type of new high — 20, 60 or 250 day highs are important to me.
If you’ve ever done any tests on indicators (I have) then you’ll know why I don’t like to use them. They simply don’t generate an edge — and it’s so easy to get a false sense of security looking at them.
Very astute rtidang advice. I have played several breakouts and have done OK with them, however, your approach actually gets in before the bulk of the buyers. Should the rend reverse just after the breakout level, you still have a reasonable gain. Very good. You also can see just where you need to get out should the breakout be weak. Very good advice.
The getting in early part I like — but I can also get stuck in trades that just sit there. The best part is just having a method I’m comfortable with. :-)
I’m recommending caution for the upcoming week! I don’t like this last breakout. It looks weak. When breakouts fail at levels like these the downside move can be fast.
So while we’re still in an uptrend on all time frames (hourly, daily, weekly) and the watchlist stocks are cranking out some winners (yes!) — I’m still skeptical.
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what are your favorite indicators for a nice breakout?
Hi Bob,
I like to look for new highs. That’s it. Simple. Easy to follow. Once we have new highs I like to see if volume is coming in. To me it’s important to note the type of new high — 20, 60 or 250 day highs are important to me.
If you’ve ever done any tests on indicators (I have) then you’ll know why I don’t like to use them. They simply don’t generate an edge — and it’s so easy to get a false sense of security looking at them.
David John Hall
Very astute rtidang advice. I have played several breakouts and have done OK with them, however, your approach actually gets in before the bulk of the buyers. Should the rend reverse just after the breakout level, you still have a reasonable gain. Very good. You also can see just where you need to get out should the breakout be weak. Very good advice.
Thanks Attila,
The getting in early part I like — but I can also get stuck in trades that just sit there. The best part is just having a method I’m comfortable with. :-)
What do you recommend for the upcoming week?
Hey Karun MOney (nice name!),
I’m recommending caution for the upcoming week! I don’t like this last breakout. It looks weak. When breakouts fail at levels like these the downside move can be fast.
So while we’re still in an uptrend on all time frames (hourly, daily, weekly) and the watchlist stocks are cranking out some winners (yes!) — I’m still skeptical.
Good luck!