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Best Trading Strategy – Trade Breakouts!

Best Trading Strategy!

To make money you must be in a stock when it start to rise and the best way to be on a stock when the price start to rising is to buy the stock on a breakout! What is a breakout? Well, a breakout is an upward movement, any time horizon and when the stock rieses over a resistance level. There is also usually higher volume and the stock stays over the resistance and continue to rise.

The reason why trading breakouts is such an great strategy is that once the price has established over a breakout level it tends to continue in the same direction. A breakout can also be about a breakthrough a Moving Average or when an oversold stock which is in a down trend and that after a period of consolidation, rising above the 200-day moving average.

Breakout Trading Strategy

Whether you trading intraday, over a few days, weeks, months or longer is the concept of breakouts the same. It can be used in any trading strategy whatsoever.

Regardless of how the market will react in the future, the stock need to make a breakout from a particular level, such as going over their current all time high.

Trade new highs

This is one of the best ways to trade. New highs is necessary for a stock to be ableĀ  to continue to rise , unless the stock already is down 70%.

So for a stock should be able to continue to rise it requires new highs.

What is really worth thinking about is if the stock rises because it makes new highs or make new highs for the move up? The simplest type of the breakout is new highs, you can simply count all stocks that makes a new high as a buy candidate.