Eakout Trading Strategy

B4Trading - Tamil
INTRADAY BREAKOUT TRADING STRATEGY

Intraday Breakout Trading Strategy :
1. What is the Intraday Breakout Trading Strategy ?
2. Benefits of breakout trading
3. When should void breakout trade ?
4. How to find high probability breakout trading ?
5. Price action for the breakout bar
6. How to enter a breakout ?

1. What is Intraday Breakout Trading Strategy ?
• Break out means moves below any support or above any resistance. Price
breakout from
 First support and resistance is a break of previous candle high or low,

 Last swing high or low (shorter-term support and resistance),
 Major support and resistance,
 Trend line or moving average.
Breakout
2. Benefits of Intraday Breakout Trading Strategy :
There are several benefits to trading breakouts. For example
 Momentum is with you – Trading breakouts allow you to enter your trade
with momentum at your back
 Catch big trends – If you were to trade pullbacks, sometimes it may never
come. But with breakouts, you never have to worry about missing another
move in the markets
3. When should void breakout trade ?
 Don’t trade breakouts when the market is far from Support/Resistance (S/R) and
Are there obstacles overhead or underfoot that could possibly obstruct an
advance or decline
 Don’t trade breakouts without TIGHT TRADING RANGE (consolidation) before the
breakout
 Don’t trade breakout when the break set against the dominant pressure
➢Don’t trade breakouts when the market is far from
Support or Resistance (S/R) Why ?
• Because you don’t have a logical level to place your stop loss. Even if you do, it usually
results in a poor risk to reward profile Based on the stop loss placement we can divide
the break out into three types
➢False Breaks (S1), Tease Breaks (S2), and Proper Breaks (S3) :
• Whether to take a position or not on a break is always a function of how well the technical
credentials of the chart back up the prospects for follow-through.
➢ Based on my experience, these are the best times

to trade breakout :
• When the market is trending strongly

• When there’s no Support/Resistance nearby
• When the market is forming consolidation at Support and Resistance area
• When there are higher lows into Resistance or lower highs into Support
Let me explain you above four points in details
1. When the market is trending strongly :
• If the market is trending strongly, you’re unlikely to catch the trend on a

pullback. So, what can you do? Well… you can trade the breakout, right
• You can get long when the price trades above the swing
high, and place your stops below the last swing low
2. When there’s no Support/Resistance nearby :
Think about this. If you’re short of the market, where would buyers come in?
If you’re long the market, where would sellers come in? Support and
Resistance, right ?
3. When the market is forming consolidation at the
Support and Resistance area :
Why do you want to trade breakouts with consolidation ?
• Here’s why: A consolidation would attract stops in the market as traders place
their stop-loss beyond the highs/lows of the consolidation.
• It could be to protect their existing positions or to trade the breakout in either

direction. So, when the market breaks out of consolidation, you get a double
dose of pressure. And it’s caused by traders looking to protect their positions
and traders looking to trade the breakout. An example:
4. When there are higher lows into Resistance or

lower highs into Support ?
 Higher lows into Resistance is a sign of strength by the buyers and

there’s a good chance the market will break out higher. Why ?
 Because if there were strong selling pressure at resistance, the price

should have fallen quickly. The fact it didn’t tell you that buyers are
willing to buy at higher prices and thus forming higher lows into
Resistance. Visually, it looks like an ascending triangle. Here’s an
example:
EXAMPLE :
EXAMPLE :
➢How do I enter breakout trades ?
• Well, there are usually 3 ways you can trade a breakout.
1. You wait for a candle to close :
• It’s easier to execute the trade psychologically as the candle has closed in your
favor,
• You may get a poorer risk-to-reward (as the market has already moved in your
favor)
2. You trade breakout using a stop order :
• It’s harder to execute the trade psychologically because there are no signs of
“confirmation”
• You usually get a better risk-to-reward (as you’re entering near the breakout level)
3. You trade test of the breakout :
• After the breakout, any low volume test is a high probability entry with low risk and
high reward
B4Trading – Tamil
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B4Trading - Tamil

INTRADAY BREAKOUT TRADING STRATEGY

1. What is the Intraday Breakout Trading Strategy ?

2. Benefits of breakout trading

3. When should void breakout trade ?

4. How to find high probability breakout trading ?

5. Price action for the breakout bar

6. How to enter a breakout ?

1. What is Intraday Breakout Trading Strategy ?

 First support and resistance is a break of previous candle high or low,

2. Benefits of Intraday Breakout Trading Strategy :

There are several benefits to trading breakouts. For example

3. When should void breakout trade ?

➢ Based on my experience, these are the best times

• When the market is trending strongly

• If the market is trending strongly, you’re unlikely to catch the trend on a

Why do you want to trade breakouts with consolidation ?

• It could be to protect their existing positions or to trade the breakout in either

4. When there are higher lows into Resistance or

 Higher lows into Resistance is a sign of strength by the buyers and

 Because if there were strong selling pressure at resistance, the price

• Well, there are usually 3 ways you can trade a breakout.

1. You wait for a candle to close :

2. You trade breakout using a stop order :

3. You trade test of the breakout :

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