Master Trader Breakout: Breakouts and Breakdowns are great setups as Igniting or Continuation trades in trending markets. But many fail without the proper clues or, using the poker analogy, “Tells”. Master Trader teaches how to buy/short the initial Breakout/Breakdown, as well as retracements and reversals to Support/Resistance, as well as continuation patterns. With all Breakouts and other bullish setups, we need a Price Void (i.e., insignificant resistance to the left) to allow the issue to move higher.
Setup: After the +Gap Breakout on 9/19, LEVI closed red, pulling back to Minor Support (mS).
The next day it traded all the way down to the 9/18 low, taking out the prior day’s low, and snapped back with a bullish Range Expansion bar (+R/E), closing with a bullish Bottoming Tail (BT) and green candlestick. That’s a bullish continuation pattern after initial Breakout!
Because of the bottoming pattern, it had a huge Price Void (i.e., insignificant support to the left) to allow for a fluid swing trade higher.
The entry was to buy stock or liquid call options over the high of this +R/E/BT candle with a protective stop under the low of it.
Multiple Time Frame (MTF) Alignment: Although not shown (but mentioned in the Telegram real-time trade alert to subscribers), the weekly chart was a bullish 1-2-3 Continuation Breakout with a Price Void (another bullish MTS Concept), helping to ensure a high probability of success of the issue moving higher.
Trade Execution and Additional Analysis
After entry, we are always in management mode, trailing pivot lows and monitoring price action with bar-by-bar analysis.
After entry, you can see in the Telegram trade updates how we recommending selling partial lots into strength to protect gains. Trailing under the low of a daily bar is a proper way to manage gains.
Profit: As you can see, the trade made $527 profit (12.3% return) in an easy-to-manage 3-day swing trade. Had you bought 2000 shares and followed our trade management, you would have made $2,500 profit.
Conclusion
Master Trader Strategies (MTS): Learn our proven methods for high-probability trades in all market conditions!
Directional Swing and Options Trades daily in the Advisory Swing and Options Trader Letter.