Forgive me if this topic has already been discussed, I ran a search and did not find anything. I am an inexperienced trader who tries to swing trade stocks by buying retracements after breakouts and breakdowns. We know that both trend following and trend fading can both be profitable if done right. And we also know if done right, buying the breakout can also be profitable. But can you make a strategy that fades breakouts on the 1st day work? It seems like you would make small amounts of money some times but then get killed if the stock continues to run-up. Thoughts?
Fading a breakout on the first day may be risky. If you wait for the breakout to fail and short it with the stop over the breakout point, it may be profitable. An example of this would be the 2B pattern which was discussed before.