The ones that do breakout without a retrace create sufficient enough profit to make up for their less frequent occurrences. Momentum works both ways, not just to the downside.
just a hint here cause i don't like to divulge specifics of a strategy--go back and check breakouts and see how many went below the breakout day's lowprice once they brokeout ? Case in point BDK see if it goes below 72
---------------- A breakout doesn't have to go below the breakout low for it to be a failed break...even a test of those lows would suggest that there are sellers trying hard to push down, and not enough bidders to support price. Within the first day or two, you'll know if you f---ed up, but why take the risk anyway. ---- I like bdk, but buying it at 72.40 on the day it broke out would have been a low prob trade, not to mention price was at a double top during that time, but now its coming back down a bit..looking kinda attractive.
cbi... newbs would go long at the break and close at 21.50. Price then reversed two days later and eventually broke and made new lows.
The low prob trade is on the pullback . . . if it's pulled back, it's a weak stock and you don't want to own it.
it brokeout at 21.50 -stop would be 20.50 $1 goes to $24 sell half at $23.50 stopped out half at either 21.50 if you moved it to BE or at 20.50 if you didnt touch your intitial stop --whats not to like there ? Managing a trade is as important if not more important than taking the trade. If you added position sizing you wouldve made either .5R or 1R on that trade-wouldnt call it a loser. You'd want some sort of consolidation before breaking out--it ran from 17 to 21 before it brokeout. Not exactly a base there
Don't buy this pullback, its a weak stock! ... Keep buying at the highs, and see whats happens. Buy low, sell high.
or these... here let me draw some fibs! LOL!.. where's 1a2b3cppp so we can trash this thread ? :eek: jk
I only buy on buy stops placed above the old highs. You get what you pay for. Buy weakness and you get weakness.
If you had bot at $9.14 instead of ~ $8, you would have saved only a little more than a dollar . . . but what's the opportunity cost of getting stuck in dead money stocks, or worse?