Buying the breakout

[foredog]

If you have three consecutive 30 min bars with the same high and buy when the stock trades two ticks above this range (eg 3 highs of 280, buy at 280.5), where would you place a stop?

at the low of the last candle?

or a few ticks below the 3 highs?

eg if the last bar was 275/80 stop at 274.5 or 279?

I know there's no perfect answer just wondering what everyone else does.

(haven't got a chart to attach at the moment, sorry)

 

[Chorlton]

If you have three consecutive 30 min bars with the same high and buy when the stock trades two ticks above this range (eg 3 highs of 280, buy at 280.5), where would you place a stop?

at the low of the last candle?

or a few ticks below the 3 highs?

eg if the last bar was 275/80 stop at 274.5 or 279?

I know there's no perfect answer just wondering what everyone else does.

(haven't got a chart to attach at the moment, sorry)

Wouldn't this depend on how agressive one wanted to be? If one wanted to be very agressive then a stop placement between the H & L of the last candle may also be a possibility.

Personally, I would look at previous set-ups to give me some indication of what kind of results (% winners and average # number of ticks that were being achieved). From this I could work out whether a tighter stop was needed or whether I could afford a bit of extra wiggle room.

 

[rathcoole_exile]

personally i'd look at using pivot points integrated into your breakout strategy, and then using them as both profit targets and stoploss exits

 

[foredog]

basically for the last few weeks i've been leaking money.

I've been buying/selling Uk stocks on the break of either an Inside bar or a double high (on 30min or 60 charts) in the direction of the day, and at the moment my win/lose ratio is about 6/1, not good.

Every time i deal and i have a stop just below the price i get hit then it goes my way, every time i leave my stop at the low of previous candle that gets hit too (or so it feels).

I'm not having big losses, less than 1% on each trade but it's still hurting now!

No up days in a fortnight's a killer for the brain!

Any ideas......anyone want to buy a big issue?

Cheers

 

[Chorlton]

and at the moment my win/lose ratio is about 6/1, not good.

Maybe i'm confused here but you are saying that you have a a win/loss ratio of 6:1 which is roughly 86% winners. IMO this is very good!!!

Assuming that your R:R is also reasonable, then coupled with your 1% risk per trade (again pretty reasonable), I would be very surprised if you weren't making money over the long term.

Chorlton

 

[luckyd1976]

If you have three consecutive 30 min bars with the same high and buy when the stock trades two ticks above this range (eg 3 highs of 280, buy at 280.5), where would you place a stop?

at the low of the last candle?

or a few ticks below the 3 highs?

eg if the last bar was 275/80 stop at 274.5 or 279?

I know there's no perfect answer just wondering what everyone else does.

(haven't got a chart to attach at the moment, sorry)

Generally for my breakouts

1) Scalping *I would say +/- 0.5%
Examples... Long Stock at $100, Stoploss $99.50 Short Stock at $100, Stoploss $100.50

2) Daily charts *2-3 bar trailing or discretionary chart reading for sell signs.

 

[foredog]

Maybe i'm confused here but you are saying that you have a a win/loss ratio of 6:1 which is roughly 86% winners. IMO this is very good!!!

Assuming that your R:R is also reasonable, then coupled with your 1% risk per trade (again pretty reasonable), I would be very surprised if you weren't making money over the long term.

Chorlton

Got that a bit back to front, one profit, five or six scrappy losses for about the last week.

Not losing massive amounts, just my account slowly dribbling away.....

 

[barjon]

basically for the last few weeks i've been leaking money.

I've been buying/selling Uk stocks on the break of either an Inside bar or a double high (on 30min or 60 charts) in the direction of the day, and at the moment my win/lose ratio is about 6/1, not good.

Every time i deal and i have a stop just below the price i get hit then it goes my way, every time i leave my stop at the low of previous candle that gets hit too (or so it feels).

I'm not having big losses, less than 1% on each trade but it's still hurting now!

No up days in a fortnight's a killer for the brain!

Any ideas......anyone want to buy a big issue?

Cheers

foredog

uk equities have been pretty volatile of late, so maybe market conditions have changed since you tested your strategy.

If this bit Every time i deal and i have a stop just below the price i get hit then it goes my way is correct, then maybe you should consider trading the pullback after a break rather than the break itself.

I trade uk equities via 3 bar retracements off eod, so I'm taking a break of the swing low bar high. I want to see a bit of oomph in the break and not the price just staggering through. I go down through the timeframes to look at that.

Hope things improve for you

good trading

jon

 

[foredog]

Thanks Jon

I was considering waiting for pullbacks as you said, although you miss the odd one that takes off like a rocket you get to miss all the chopping about as well.

I'm sure there's light at the end of the tunnel, just hope it's not the 1215 from euston!