Once you know a stock has a history of running, remember that…
News Matters
Always keep an eye on the news. StocksToTrade's Breaking News Chat is great at alerting traders to potential new catalysts…
Traders love news — it's like a magnet that pulls them in. And we want traders to have a reason to buy.
HUBC had acquisition news yesterday which caused it to gap up and have a breakout.
Those are just two of the major criteria to spot a potential breakout…
Other Criteria for Breakout Success
Premarket Action: Look for stocks that gap up big in premarket. This means they're on everyone's radar.
Key Levels: Pay attention to the breakout pattern and key levels. In HUBC's case, it bumped up against 80 cents multiple times before it finally broke through.
Confirmation: Once a stock breaks out, you can wait for it to retest the breakout level to confirm whether it can hold it or if the breakout will fail.
Best Entry: The key to successful breakout trading is getting the timing right. The best entry I like new traders to focus on is in the afternoon. Look for that stock to prove it can break out, hold the level, and continue higher with a VWAP hold high of day break with high volume. Those can be some of the most powerful breakout moves.
Final Thoughts
That's my simple recipe for trading breakouts.
Remember, these patterns repeat. It's all about finding the stocks with a history of running, hot news, strong premarket action, and the right pattern.
And don't forget the best entry point.
Now, I know I've thrown a lot of terms at you, but don't worry if it sounds like a word salad.
These are simple concepts. But you gotta see these patterns play out over and over again to really grasp 'em.
The best way to do that is by attending our free live training sessions multiple times per day.
Check out the schedule here...
Our team covers the tools to help you spot and execute trades in some of the hottest stocks…
Plus, the patterns and catalysts that are working in the current market environment.
Sign up for the next free session now!
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
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