Types of Breakouts?

[AllanXT]

You could include gap ups and gap downs, following areas of congestion.
However, these departures from previous price schedules may not be long lived owing to rapid exhaustion. If they continue to motor, then techchnically you could say its a breakaway situation leading to new price schedules or possibly developing into new (higher or lower) areas of congestion.
Careful attention to the background can be very helpful.

Gap breakouts sound interesting. I would have to do some probability testing to determine the likelihood of a continuation on the gap move. I will add it to the list.

Thank you SOCRATES!

 

[AllanXT]

Breakout List Update

TYPES OF BREAKOUTS

1. Highest High / Lowest Low Breakout
2. Volatility Breakout
3. Opening Range Breakout
4. Post Breakout Patterns (ilia king)
5. NR7 Breakouts (FTSE Beater)
6. Continuation Breakouts (Pennants, Traingles, Wedges) (Skimbleshanks)
7. Ross Hook Breakout (mheitkoe)
8. Gap Breakouts (SOCRATES)

Are there any other types of breakouts that can be tested?

Thanks and good trading all....

XT

 

[Skimbleshanks]

AllanXT, it might help if you removed the word 'continuation; in front of pennants, triangles and wedges - you put it there, not me. 😀

 

[chump]

Tip

Allan,
I will give you a tip to add to your list..if you try to trade your list of breakouts without understanding why they are formed you will get nothing more than a random chance of success.

 

[cd173]

How about 5min & 15min bar lateday breakouts.....or has that already been discussed??

 

[TheBramble]

Not sure what the significance of this collection is going to be unless you're planning on writing a book, but you may want to consider breakouts from channels, support and resistance.

Although technically they're not breakouts, if you're going where I think you're going with this lot, you might want them on board.

 

[AllanXT]

Continuation

AllanXT, it might help if you removed the word 'continuation; in front of pennants, triangles and wedges - you put it there, not me. 😀

Thanks for mentioning that. You are exactly right. The breakout can occur on either side of the pattern. Good point. I will update it.

 

[AllanXT]

5 and 15

How about 5min & 15min bar lateday breakouts.....or has that already been discussed??

This is a good one. Thank you, I will add it to the list.

 

[AllanXT]

Channels & S/R

Not sure what the significance of this collection is going to be unless you're planning on writing a book, but you may want to consider breakouts from channels, support and resistance.

Although technically they're not breakouts, if you're going where I think you're going with this lot, you might want them on board.

Thank you sir. Another great addition to the list. I am not planning on writing a book. I would need an outstanding track record and some other credibilities that would make me worth listening to from a trader's perspective.

I am trying to build a list of all breakout types that can serve as a reference for any member on this site to use. I believe that breakouts are a prime testing area for strategies.

Allan

 

[AllanXT]

Breakout List Update

TYPES OF BREAKOUTS

1. Highest High / Lowest Low Breakout
2. Volatility Breakout
3. Opening Range Breakout
4. Post Breakout Patterns (ilia king)
5. NR7 Breakouts (FTSE Beater)
6. Pattern Breakouts (Pennants, Traingles, Wedges) (Skimbleshanks)
7. Ross Hook Breakout (mheitkoe)
8. Gap Breakouts (SOCRATES)
9. 5min & 15min Late-day Breakout (cd173)
10.Channel Breakout (TheBramble)
11. Support & Resistance Breakout (TheBramble)

Are there any other types of breakouts that can be tested?

Thanks and good trading all....

XT

 

[AllanXT]

Breakout Formation

Allan,
I will give you a tip to add to your list..if you try to trade your list of breakouts without understanding why they are formed you will get nothing more than a random chance of success.

I think this is a great point. Can you offer some insite as to how breakouts are formed? I have seen that in certain breakouts high volume is necessary for the breakout to occur. I would suspect that shifts in supply and demand would have an impact. I have not studied the technical formation of breakouts. I think it would add great insight to a trader's ability to trade breakouts. I would like to hear what you have to offer in this area. Thanks for this good point.

Allan

 

[BBB]

How about false breakouts - lol

 

[cd173]

Hi Allan

Let me know if you would like an explanation behind the 5 & 15min lateday breakout.
It's actually very simple. You probably already know it as something else.

Cheers
Chris

 

[AllanXT]

Explanation

Hi Allan

Let me know if you would like an explanation behind the 5 & 15min lateday breakout.
It's actually very simple. You probably already know it as something else.

Cheers
Chris

Yes, an explanation would be great Chris. Thank you.

 

[AllanXT]

Breakout List Update

TYPES OF BREAKOUTS

1. Highest High / Lowest Low Breakout
2. Volatility Breakout
3. Opening Range Breakout
4. Post Breakout Patterns (ilia king)
5. NR7 Breakouts (FTSE Beater)
6. Pattern Breakouts (Pennants, Traingles, Wedges) (Skimbleshanks)
7. Ross Hook Breakout (mheitkoe)
8. Gap Breakouts (SOCRATES)
9. 5min & 15min Late-day Breakout (cd173)
10.Channel Breakout (TheBramble)
11. Support & Resistance Breakout (TheBramble)
12. Range Breakout (AllanXT)

Are there any other types of breakouts that can be tested?

Thanks and good trading all....

XT

 

[Skimbleshanks]

Why do you want to test them? Surely you want to learn how to trade them.

 

[AllanXT]

Why do you want to test them? Surely you want to learn how to trade them.

I was planning on doing probability / statistics testing of the breakouts. Another post suggested learning how the breakouts form. What do you suggest I do in terms of "learning how to trade them?" Where would you go from here?

thank you,

Allan

 

[Skimbleshanks]

Well to be brutally honest, I would never encourage anyone to trade breakouts the way books and courses teach. Because people like me are waiting to fade them as it's usually a very profitable trade.

In other words, I'm looking to get out of my long as you're getting in. The result is usually a nice deep pullback beyond the point of the breakout. You are now in a losing trade and it's dropped below support, so you sell at a loss. And therefore if you don't know what you're doing, trading breakouts is not the thing to do, IMO.

So if you just take one from your list, and really get to know how it forms, when and where it forms, and what happens after it forms, then you'll be well on your way to trading one setup properly.

Now if you want to spend a lot of time and effort in doing your probability/statistics testing, then great. Is the purpose of this to narrow down your list? If it is, you'll still need to understand fully its formation characteristics when your testing has selected the 'ideal' candidate.

Some on your list are intraday, and others are usually used end-of-day, and some can be both - do you realise this? NR7s are EOD, gaps are intraday, etc. Have you decided which timeframe you are going to trade? If you have, this will also reduce the number of types of breakout trades open to you on your list.

I do hope this doesn't sound as if I'm trying to knock you, as I'm not!. I'm just trying to get you to think now about what you're planning to do, so that you won't be faced with disappointment after putting in a lot of effort.

Just to show you what happens when breakouts fail, here's a chart of the emini S&P (ES) on Thursday, which shows how three different types of breakouts failed.

 

[SOCRATES]

Skimbleshanks,
Surely these three examples you show on your chart cannot be breakouts.
They are quite the opposite. They are false moves in the opposite direction
to the trend, which in this chart you show above , is downwards,
- because of weakness in the background,
which appears not to have been resolved, hence the gap down to start with,
followed by what is patently a droopy market, losing ground all the time,
with alternating periods of tentative support and half hearted upward spiking,
inexorably leading to lower prices, without a floor in sight ! Sorry. Not knocking
you either, but is there some bullish clue we are all missing ?

 

[AllanXT]

Well to be brutally honest, I would never encourage anyone to trade breakouts the way books and courses teach. Because people like me are waiting to fade them as it's usually a very profitable trade..

Thank you for the great post. I agree that the success percentage of some breakouts is very low and a greater percentage for false breakouts exists. I do think as you have pointed out that breakouts are an area of opportunity whether they are traded positively or faded. The essence of your post suggests that it is wiser in most cases to "Trade Against" breakouts. I think it is a valid point and should be supported in probability testing on a regular basis.

thanks for the great post.

Allan