Buying a Breakout Stock AFTER the Breakout – the POST-BREAKOUT

There will be many upcoming posts about my challenge for myself this year – starting with a very very small account, and having to deal with (or maybe not?), the PDT rules. There are ways around it, I’m employing 2 of those ways, but the trade sizes then must be kept extremely small. Doing a small account is something I’ve never done over my trading career, so there has been plenty to learn, and I’m really enjoying the challenge and the experience. All of this was discussed in the conference call recently. The way I’ve set this up and approached this, I am avoiding the PDT rules, small position sizing, but I do a lot of trades. This post, and this one. are about 2 BKO trades I did on 3/8. And again. WHAT IS THE TREND, and where are we in that trend.

People, traders, almost across the board, have no idea at all about an extremely important tool in markets – READINESS TO MOVE (RTM), discussed here also. Everything I do, in individual stocks, not in my index option trading, individual stocks – it all surrounds the BREAKOUT. The Pre-bko, the actual bko, and the post-bko when the trend is up – all of these also surround RTM. The shortest amount of time spent in a trade and the biggest potential movement.

Do you PLAN OUT your trades? Probably not. How do I know that? Most people don’t. It never ceases to amaze me the lazy lazy approach MOST people have in trading.

ARQL broke out early in pm trading on earnings. So, I PLANNED OUT MY EXACT APPROACH to ARQL, written on the 60 minute chart below – AHEAD OF TIME. Read my plan. Worked beautifully. I am not afraid of breakouts – when they SET UP WELL.

 

At times I directly buy BKOs – at the market, right into the run, but – not when they are up more than about 15% above the clear BKO RES line. So i need to see a pullback/reset. and a new area begins to set up – thus my buy in the little reaccum on a, YES, a SPRING. ARQL at the time was up over 40%, 40%, got it? – at the time. I am not afraid of QUALITY BKOs. Then I look for my SPECIFIC setup for that SPECIFIC technical situation. If you have not spent the grueling, but enjoyable actually, hours to develop clear solid high-probability setups – then why not?

 

 

And I sold the position out with a solid 15% profit:

 

 

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About traderscott 1128 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

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