BreakOut and FakeOut Strategy Development

Discussion in 'Strategy Building' started by shotse, Dec 19, 2011.

  1. shotse

    shotse

    Upward channel and downward channels will be analyzed to trade the breakout or the failed breakout aka the fakeout.

    Confirmation of a breakout = increased volume and increase volatility

    To trade the fakeout I will be using the Wolfe Wave theory to determine exit points to take a profit. I will also use the Wolfe Wave theory to determine exit points to take a profit for confirmed breakouts as well.

    http://i.investopedia.com/inv/dictionary/terms/AT-wolfe.gif

    I'm looking into diversifying my speculation by following a momentum and swing based trading strategy. The momentum trading strategy will look to take profits all throughout the day while exiting all positions by the end of the day. The swing based trading strategy will look to enter on the confirmed breakout/fakeout and hold it for longer than a day to capture bigger moves in the stocks price.

    How will I find stocks to trade this strategy with?

    I was thinking about looking into sectors that have been performing poorly or excellently for 1-4 week time span to narrow down the choices of stocks to trade with. I will use www.finviz.com free stock screener to find upward and downward channels. I will rank them with the highest probability of a successful outcome by the greater the volume, the greater the volatility, the greater the touches on the trend line and the use of some technical indicators.

    Now onto the technical indicators I haven't researched or looked into technical indicators that would aid me in my decision support for making these types of trades. I'm going to research past data of breakouts/fakeout stocks to see what multiple technical indicators were saying and try to find a common similarity between them to find a useable technical indicator that can help me with my decision support.

    Anyways I just listed my basic idea, I know more works needs to be done to make this trading strategy better than it already is. If anyone can recommend anything or give criticism that would be great. Thanks everyone and happy trading!!
     
  2. breakouts are for retail losers...........

    here is a trip top breakout to get the long pendings
    then crank it back and blow all the long stops.

    the last push up ticked it past by a few on the top to get the last of retail in.

    it took 6 hours to set this trap up.

    then the clean n' jerk.

    cheers,

    s
     
  3. now lets look at how it should be played..........

    trip top fully diverged at the moneyline.

    zero lag cross

    puke south to a db slingshot setup and the fib 5.76 shopster full pull.

    db slingshot , fully diverged on the zero lag
    back to the money line

    cheers,

    s
     
  4. now long from the diverged db slingshot .

    a full 5.7 pull back to the .86 retrace of the original move down.

    exit door, go to lunch.

    cheers,

    s


    :cool:
     
  5. shotse

    shotse

    the reason why the breakout/fakeout strategy is because for the EXACT reason what you said first about breakouts are for retail losers. If they are losing there is some money to be made. That's my rationale. I like your trade set up and I was just live testing it on QQQ and checking out the past charting off QQQ. I can see your method working as well by capturing the large swings in price movement.
     
  6. session boxes.

    blow the top off the euro session in ny
    grab the long pendings and run it back down.

    ...............................

    blow the bottom off the euro box in ny
    grab the short pendings and yank it up.

    go down again
    yank it back

    bankers 3

    breakout guys zip

    same old.

    get your heads wrapped around selling the top and buying the bottoms.
    or not............:)
    ......................................


    learn fib, learn diverge, and above all think different from the rest of retail.

    cheers and seasons greetings,

    s
     
  7. " I can see your method working as well by capturing the large swings in price movement............"

    all the big moves are fibbed off 4 setups with price.

    s

    :cool:
     
  8. one more...........

    bankers 4
    breakout guys zip

    bag 'em and tag 'em

    off to the beach.

    s