The subject of this thread is within the title itself. Do you consider breakout trading to be a high-probability way to make money in the markets, or do you consider it to be a fool's game? I think we can all agree that breakouts do occur but I'm speaking generally...when price typically reaches an area of support or resistance.
I think its a fools game yes, they do occur but most of those who waits them do not know how to manage a position therefore they kicked out of it too early, of waiting too late why is that ? because the word breakout means that something was happening (usually a choppy market between the supports and resistance on many time frames) which traders have now idea how to play out... therefore all the hopes - that after the breakout market will be so strong that inability of the trader to play in choppy market will not be important ... that rarely happens... so for those who can play choppy and trending markets in different time-periods at the same time, the fact of breakout is not of the major importance and , for those who can't breakout will not make a big difference
[Frederick Foresight] Maybe this is too. You've shown yourself to be a Leftist, so I'm putting you on ignore. I may have to suffer you assholes destroying America, but I don't have to listen to you flap your gums.
All of which depends on how thoroughly one has characterized his market and tested this particular strategy. If he knows exactly how far the apparent breakout must reach in order to shift the probability of success to his side and what to look for in order to determine whether or not the trade is in trouble, then trading breakouts can be as mechanical as one wants. There are many instances, particularly during the first few minutes of the open, when one must act on breakouts without hesitation. Otherwise, he ends up chasing price, which is never a good idea. But if he doesn't know what he's doing, he will more likely wind up with a loss at the beginning of his session, which, while sometimes unavoidable, is not the best way to start the day.
I often think one of many reasons the 95%ers lose is not doing enough, they see a pattern(forest), but never investigated the trees. I recently started mentoring a trader who is on the fence, slightly profitable after number of years, so he understands charting fairly well, but he had no idea of what I meant when I asked him about the bars. There are differences in being good enough in a job and being a Master at it, you can make a living at trading being good enough and you can make a life by becoming very good at it. You have choices of how much you want to dig in. Of course, more choices means much more work. Al Brooks had it right of Bar by Bar, he makes it too hard for many to understand much, at least for me. But I broke down bars in the 80's when I was drawing by hand, I made a name for each one and where in the trend and disposition of so many bars later, I have names for over 50 bars and dozen more for 2-5 bar formations. Does it make me a better trader, maybe and maybe not, LOL. Breakouts, risk will be much greater, other side of price action and if a Triangle, perhaps the apex of the triangle for risk-but will be stopped out more cause of flares. I will take Breakouts on half my signals, they are confirmations of it moving in the direction I desire, do I trust them? No more/less than when I am waiting for price to come to my price, but I have time stops in place and often times it is reduced cause it is a breakout. I really prefer the Breakout/Retrace, let others get the slippage of the breakout then Pros will push market back to screw the little trader and as they get stopped out, I am happily going in. As far as Breakouts from Trend lines, I don't do them, unless they are a Triangle and I have rules on how the Triangle must be drawn, am much more picky. I prefer price coming back to my area, risk is half on some signals which means I can do twice as many lots. Also, comes down to where price is in relationship to Swing of current trend(3 waves of trend/ 2 counter-trend waves), Elliott is seldom right one wave counts, but does help me to know how much possible movement to expect before possible reversal or chop. Markets has taught me not to be patient for my style of day trading for ticks, but even for long term stocks, have exactly same money management rules.