I started this thread almost 2 yrs ago. I still like breakouts, but I've learned a lot sinse then, and from many of the charts posted, and my more advanced understanding of PA, entry on these breakouts, was actually the day before, or sometimes a week before price actually brokeout. When Price breakouts, its reaching resistance from previous days/ weeks, and most professional traders that read price, are taking profits here, selling to the newbs like I was a while back. This is one reason why breakouts fail many times, or reverse the next day, because of this profit taking. Something I didn't really understand 2 years ago. The breaking of the trend line is almost meaningless, however thats how a breakout is defined eventhough sometimes the entry comes days before. from now on i'll post breakouts before they happen, or at least try....showing a before and after. anyone that likes to trade such setups, post your charts too, to help others learn this method.
Here is ISRG, one of my favorite stocks. Entry on this one was last week after a minor pullback and its break of highs from wednesday. I think it can hit 120, but i dont actually have a trade on it.
Here is CME, another big mover. Entry for this one was 9 days before the actual the breakout. As you can see, two days after the break, price reversed the full length of the candle, before making new highs, but if you were in 9 days ago, that aint nothing, and you'd probably have scaled out before then. Great example of profit taking, selling to the eager amatures, and traders buying on impulse like I used to do. I'm too smart for that now
BWLD, nice gap up, and looking to short this on monday, however as far as the breakout goes, it tried on two seperate occations. Once on feb 3rd, then again on the 6th. The scale out points are of course where Id take profits, but obviously because of the gap, scale points 1 & 2 can be ignored. Id be out 100% if i took this trade, or at least 90%, with stops at BE, and get a free ride out of it. The orange lines represent fib levels, I cant draw fibs on the chart, so its just an estimate, but price pulled back from its high, and came down to about a 38.2 retrace.