When executed properly, breakout trading can be extremely lucrative. Volume confirmation is the most critical issue. A breakout without above-average volume typically fails or devolves into a false move.
On your chart, always note important resistance levels. Wait for price to close above resistance with strong momentum. This verifies trade quality and demonstrates strength.
Pick the proper entry and timing
Retesting the breakout zone is quite usual. For most people, this retest is the most effective beginning point. It provides more reward potential and superior risk management.
During lunchtime sessions, try not to hunt breakouts. Usually volume decreases at this time. Less activity raises the likelihood of failure.
Concentrate on periods with great volume instead. Stronger movements are found in the first 30 minutes following market opening and the last 30 minutes before closing.
Set a stop-loss always slightly below the breakout level. If the deal falls through, this safeguards your money.
