All types of Breakouts

Quite simply, this thread is a new discussion board for all types of breakouts i.e. from channels, wedges, triangles etc. Post your charts and let us know why you traded what you traded and hopefully newcomers to this type of trading can learn something.

First trade of the day today - late start. Nice little breakout on a 5 min chart.

2nd trade of the day - a classic wedge breakout.

Another breakout for today.

Seems to be my day for breakouts today. Loads of news today - I think everyone must have been waiting for the news to get out of the way so that they can do some real trading.

Believe it or not - one more. It must be my lucky day.

Not much discussion here unfortunately, because I find breakouts a very interesting topic.

For what it's worth, I would argue that some, #2 for example, aren't really breakouts. A very brief consolidation, break of the trendline which is then retraced, and then a further but small continuation of the break... however it never even reaches below the swing low that starts the wedge. It barely even breaks below the second swing low of the wedge.

Certainly money could be made on that, but imo "classic" breakouts tend to break strong and begin or resume trends. In other words, way more money would be made by fading the "breakout" in #2 then by trying to ride the break into a resumption of the previous downtrend, which never occurs.

Breakouts are fast money, literally, due to the velocity price moves once one has started, but the patterns that traders tend to base them on are also, imo, the least consistent and most likely to suck you into entering a trade only to see a sharp reversal almost immediately-- the fakeout.

The thread was only started a few days ago and all opinions are welcome so thanks very much for yours. Today I have only been trading 'targeted' entries rather than 'runners' that start a trend but nevertheless this is also a subject close to my heart and it seems to be working well. Thanks again for your input and if you have some charts to show please post them in this thread.

What a crazy day with the news - haven't traded a thing....except this.

Triangle formation with a slight breakout - I'll take anything no matter how small.

A good pause and continuation on a 5 min chart today. Soon as it broke the support it re-tested my stop loss and smashed straight down for a good win.

News out of Europe is coming out shortly so I'm out until around 13:30 UK time but here's a little breakout I traded this morning on a 5 minute chart.

Wow! My best trade today on M5.

2 more breakouts this morning as we all start to get scared about the EU summit.

Very interesting indeed.
Care to elaborate on the entry and stop?

Yeah sure...quite simple really. I simply wait for a breakout candle to close over the downward sloping trend line - if it was upward sloping I would not have traded it.

Once it's closed, I place my market order along with a stop 10 pips below the last swing high. it really is as simple as that. Is this something you have tried before?

Have you

Hi, I'm a breakout trader. Every trade listed in my journal is a breakout trade. Just to share my thoughts, for the way I trade these are the key aspects of it:

I assume the market is always consolidating (read a lot of places that suggests 75% of the time price is in consolidation).

The hard part is identifying the area of consolidation, whether its a wedge, a triangle, a box, etc. I use boxes. The better defined it is the better for my breakout trade.

Once the consolidation region is defined, you need a bias, long or short. Prices breaking out with your bias will be a stronger move than a breakout against it (providing you read bias right for your timeframe of interest).

Lastly, you need a catalyst. Something that sparks up volatility to drive price in one direction. If your identification of the catalyst is right, you can spot fakeouts vs breakouts.

Speaking of timing, when you get sentiment, orderflow, and a strong consolidating region, you can pinpoint your entries pretty accurately. For strong breakouts my drawdowns usually <5 pips, and for a medium one <10 pips. I trade with sl's of 20-25 pips.

Very good approach. I think you're right, it can be very hard to spot the 'consolidation' as we need to make sure the whole world is looking at the same one. For me - they always have to look 'obvious' - there is no forcing the pattern.

I had a day off yesterday due to being ill so no charts to put up but I hear the market went a bit sideways anyway. If you have any examples of your trade, post them up for us to see.

Wow! What a boring day. Nothing much happening at all. My first trade of the day.

Heres my example: The circles are my trades that I took, the rectangles are the zones I was mentioning. I took more trades than the ones I listed on this picture, but these three shows how I spot for breakouts and bounces. You can find more pictures in my journal thread.

http://i39.tinypic.com/2cfz5m9.jpg