I first read about breakout in 2004 but did not pay too much attention to it as I was very interested in the others technical indicators. Since the day I read Livermore's book, I changed my mind. Breakouts happened back in Livermore's time and yet it is still happening today. Surely, it must be one of the most reliable trading system around. Trading breakouts has been profitable for me so far. Look out for my breakout shouts at 4:30pm there abouts if I spot any. I'm here to share.
The most important factor for breakout is volume. When unusual volume was spotted, something got to be brewing, that is where breakout traders will capitalise. If the breakout broke resistance line, it's most promising. A good trading system does not requires the trader to over trade. Breakouts are not common. The trader has to be disciplined to wait for it to happen before puting a trade. During my back testing of breakouts signal, the system churns out the most buy signals at the start of a bullish rally. That is really cool. It gives me the confidence to use this system.
Last few breakouts I spotted:
ChinaSun
BeautyChina - Outstanding! But no one knows exactly why the sudden interest in this one. T.A anble us to buy first, the reasons will surface by itself after the news maker collected enough. :P
MediaRing
Global Voice - Penny stock...resistance at 0.195
Hyflux - it's retracing with light volume.
Unifiber - Although I spotted this one, but i did not shout. Reason being I knew this counter to be very manipulative. Hence I decided to stay clear.
Let's see how will these end up.
