How I Trade Breakouts

[GonG108]

i am still wondering how long will it take for me to get in the game ( i will never start trading before i exactly know what i am doing ) , there is so much educational stuff to learn and none of the theories can guarante a succes , i have followed larry williams and many others but trading seems to be a philosophy.

[FXCommissionRebates]

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[fishingforexpips]

Good information. Forex is the way to go.

Lanes

[naynay447]

what time frame do you look at for these breakouts. Day, month...year?

[YourTradingCoach]

@naynay447

Hi naynay447,

I currently trade FX futures on a 1 minute chart, but the concept is applicable on all timeframes.

Cheers,

Lance.

YourTradingCoach

[newagepeople]

@naynay447 its m15 0_0....

[1M2N3M]

Nice video, I do trade the S & R lines and also breakouts. How I have managed to trade "breakouts" profitable. Firstly my sl is 8 pips or less. Specifically on a ranging market I simply sell a few pips before my res line and will buy a few pips above my line if a breakout happens. I do this day after day and it does work because If i am "incorrect" I take a small win or a small loss and if I am "correct" I take many more greater gains. Always look above and below the line. Go with the flow

[YourTradingCoach]

@1M2N3M

Thanks 1M2N3M,

I'm glad you enjoyed the breakout video. Thanks also for sharing your strategy.

All the best with your trading,

YourTradingCoach

[SlapaPope]

@1M2N3M

Are you still able to do this with the First in First Out Rule?

[brotharuss]

I agree with your rules. Wait for retracment to test break out line. Here is Some additional info for anyone. The measurement of time from the first touch point to the breakout point in price pattern will give you an estimated time line for your target. Your target? Thats the dollar amount from first R. touch point straight down to support line. The stop should not be below the last touch point on support line in pattern, it should be an amount below breakout line, if entering on breakout.

[stonebridgeboy86]

Good video. Buying on a retracement is the mainstay of my trading; looking for support to form around Fib lines. I can get higher gearing this way than by breakout trades which, as you demonstrate, often involve wider stop losses.

Keep up the good work Lance, videos like this can keep people away from the systems scammers and learn the markets for themselves.

[YourTradingCoach]

Hi stonebridgeboy86,

Thanks for your comment. Much appreciated. I agree entirely - the beauty of the retracement into support is that it offers a much greater potential R:R, due to the ability to place tighter stops.

All the best with your trading,

Lance Beggs.

(yourtradingcoach)

[4xleader1]

hmmm interesting... you dont trade breakouts. Yes fake break outs happen all the time. Waiting for the right moment is the most important.. there are many ways of filtering out the fake break outs.

[YourTradingCoach]

@4xleader1

Hi 4xleader1,

Thanks for your comment.

Breakouts are certainly a valid approach to trading, if they work for you. They don't for me - I much prefer waiting for either a breakout failure, or a breakout pullback.

The key is that we all find the approach that works best for us.

Cheers,

Lance.

[TheRumpledOne]

Come over to kreslik where traders are more open minded.

[YourTradingCoach]

Hi TRO,

I've seen you around the internet the last few years. We differ in trading styles a bit, but I like your approach to helping other traders.

Forums aren't my thing, but I wish you all well on Kreslik & hope you can keep it from any external influence or bias unlike many of the others.

Happy trading,

Lance

[TheRumpledOne]

Hi Lance:

Always pleasant to meet a fellow trader.

I see you like to help fellow traders, too.

The nice thing about Kreslik is that we don't have the time wasting nasty comments that other forums do. Threads don't disintegrate into a pissing contest. Debates are about the subject not the individual.

I hope you'll start a thread on Kreslik. Posting a link to your YouTube video would be permitted.

MAY ALL YOUR FILLS BE COMPLETE.

[cubanwizard]

And u only enter this trade on a raising 20sma the will give u a more probable trade

[YourTradingCoach]

Hi cubanwizard,

Yeah, in the absence of any changes in momentum (or any other signs of a potential change of trend), the higher probability is for a breakout in the direction of the prevailing trend.

Cheers,

Lance.

[cubanwizard]

Hi u dont enter on the top off the channel u enter on the bottom and the stop just under the botton suport line off the channel when u reach the top of the channel u move your stop up

[YourTradingCoach]

Hi cubanwizard,

That's my ideal scenario, although only if the R:R is acceptable and the trade gives sufficient room to at least scratch it breakeven if the breakout fails to occur.

Cheers,

Lance.

[yshahnawaz]

Hi lance,

Wat do u think about carry trade strategy and arbitrage. do they really work.

[YourTradingCoach]

Hey yshahnawaz,

I don't trade either strategy & haven't really looked into them that much. I'm quite happy with the current way I trade. So, I'm not really the best person to ask.

Sorry I can't help there.

Cheers,

Lance.

[yshahnawaz]

thats nice, i love you man.

[YourTradingCoach]

LOL!

Awesome.

Thanks for the feedback yshahnawaz,

Happy trading,

Lance

[joeyindiana]

makes sense. do you trade for a living- are you financially independent through your trading? thanks.

[YourTradingCoach]

Hi joeyindiana,

Thanks for your email.

I trade full-time. However I also have other income streams which cover my living expenses. I've written about this on my website in an article entitled, 'Transitioning from Part-Time to Full-Time Daytrading: Ensuring Sufficient Income'.

You may want to check it out.

I don't seem to be able to put links in this comment box. You'll find a link to my website in my YouTube user info to the right of the video.

Cheers,

Lance

[pierneus]

...you mentioned (win % and win/loss size ratio). I think the key for a great strategy lies in finding the best combination, which it seems very hard, because to do so, I need to collect so much data, that a whole year is maybe just enough. The market changes its behavior frequently and it's very hard to find a strategy which could be profitable during the "4 seasons".

Do you also conduct your own statistics? If so, what kind of data have you collected?

Cheers, Pierre

[YourTradingCoach]

Hi pierneus,

It might be easier if you contact me via the Contact page on my website so that we can then communicate via email without the 500 character limit.

Glad to hear your a price action trader - my preference as well.

Stats are essential. An area I've traditionally been poor at, but getting better. One of my vids deals with this topic.

Cheers,

Lance.

[pierneus]

...trends, then you might pull it off. I'm a naked trader, I don't use any indicator, I've always disregarded them. I draw trendlines and I follow the trend. When I entry a break-out, it's only because the market has stopped me out right before, and it's now moving towards the other direction. If so, I reverse the position, but I only ask the market to give me back what I lost. Actually I'm conducting a lot of statistics, hoping that I'll find the best combination between the 2 factors...

[buyystocks]

WHAT do you think of spng?

[YourTradingCoach]

Sorry buyystocks,

I don't trade stocks so have no idea about SPNG at all. (Plus don't offer trade advice).

Cheers,

Lance

[pierneus]

Hi Lance, you stated the following :"While the anticipatory entry may come at the cost of a lower win%, it does provide a greater win loss size ratio. Much of trading is a trade-off between these two components". You're right it's a combination of the two, which in this case I don't think it could really be in your favor. My experience teaches me that the losses will greatly overcome the few big profits. However, if you use other tricks or indicator and you're actually able to select...

[pierneus]

I agree 100 % that chasing a break-out in the classic way is a loser's game. You simply have no chance to earn money overall, no matter where you place your entry/exit levels.

Your way of entering the market after a break out is ok, BUT, you should wait until the highest point after a pullback is reached, there is no way you can enter it before, as you showed.

Secondly, the strategy of entering shortly before the break-out occurs, has no meaning at all. Patterns are simply not that reliable.

[YourTradingCoach]

(Reply part 1, due to 500 character YouTube limit)

Hi peirneus,

Thanks for your feedback.

The beauty of this game is that everyone finds a different style of trading which suits them. As such I'd be hesitant to say that chasing breakouts in a classical way provides no chance to make money. Although in my opinion it provides signficantly lower odds, there are traders who have made a career out of trading breakouts. Typically though...

[YourTradingCoach]

(Reply part 2, due to 500 character YouTube limit)

Typically though, they excel in other areas, certainly including both risk and money management, but also in developing an understanding of market structure in order to know which breakouts to take and which to avoid.

Similarly, we'll have to agree to disagree regarding your statements that my methods of trading breakouts don't work. Certainly when trading the first pullback after a breakout some people are perhaps...

[YourTradingCoach]

(Reply part 3, due to 500 character YouTube limit)

perhaps better off psychologically in waiting for the highest point of the breakout to be broken. That doesn't work for me - my preference is for identifying an entry point as close as possible to the point at which the pullback fails. ie. getting in well before your entry point at an area, ideally in the vicinity of the breakout, at which demand has been proven to exceed supply. My methods of entry vary, but typically involve...

[YourTradingCoach]

(Reply pt 4)

but typically involve lower timeframe analysis to identify a stall in the pullback or resumption of momentum in the breakout direction. Other times, it may simply be an anticipatory entry, expecting demand to enter the market in this area. While the anticipatory entry may come at the cost of a lower win%, it does provide a greater win loss size ratio. Much of trading is a trade-off between these two components. There's no right or wrong way to do it - just what works for you best.

[YourTradingCoach]

(Reply part 5)

Likewise with entry before the breakout. To say that this is not possible closes your mind off to any potential for the possibility to actually exist. My preference for trading within a range, for example, is to trade reversals at the range extremes, and failed breakouts. However, my analysis involves bar by bar assessment of the sentiment of the market, not just blindly looking for textbook patterns.

[YourTradingCoach]

(Reply part 6)

Sentiment analysis does allow you at times within a range, to perceive a bias towards one direction. At this time I'd be looking for a way to position early for a breakout. For example, in anticipation of a breakout to the long side, I'd be looking at a lower timeframe to identify an entry opportunity near the bottom of the range, allowing early positioning long in order to profit from the potential breakout, or at least...

[YourTradingCoach]

(Reply part 7)

...or at least the opportunity for a small profit or breakeven exit if the breakout does not occur. To say that pre-breakout price action is meaningless is not correct.

Thanks again for your feedback though. Much appreciated as it alerts me to an area which may warrant more website articles or YouTube videos.

Cheers,

Lance.

Apologies for the number of replies. This character limit set by YouTube can be a pain sometimes. :-)

[alex1razon]

great stuff mate!

quick question though, may i ask what motivates you to educate viewers? apart of course from promoting YTC site & learning more through teaching?

[YourTradingCoach]

Hi alex1razon,

Check out the FAQ page on my website for more of an answer, but to quickly summarise:

a. I enjoy teaching. My previous career involved aspects of teaching & I get a lot of fun out of it (plus learn a lot myself)

b. Let's be honest about this as well - it does make money!!! I am a firm believer in multiple streams of income & encourage all traders to do the same (whether they do trading education or something else entirely)

Cheers,

Lance.

[Phibins]

wow, great video.

you got a new sub. and i'll check out your website.

also, am i mi

mistaken to say that is a New Zealand accent im hearing?

[YourTradingCoach]

Hi Phibins,

Glad you liked the video.

Sorry, I'm an Aussie, not a Kiwi. Hope you don't hold that against me. :-)

Cheers,

Lance.

[Phibins]

no, i was just trying to guess. i lost :(.

anyways.... when i am done exams im going to start watching some of your old videos.

im a beginner in the market. and up to now its been treating me great. but i have a lot to learn and hope you can help me.

THANKS (i'll click on some ads on your website for you ;) )

[radziok]

This is not trading Breakouts, this is what is called a pullback play.

[YourTradingCoach]

Hi radziok,

Correct. I don't trade a breakout from consolidation or support/resistance in the usual method. My preference is for either (a) analysis of the price action to identify a pullback PRIOR to the breakout, in the direction of the anticipated breakout (provided sufficient R:R is available to scratch the trade in the event of failure), or (b) trading the first pullback after the breakout.

Cheers,

Lance

[affectedstudent]

Thank you coach....I am following all your posts with great interest ...

[AM2M]

Thanks Lance!

[Harley04]

Thanks for posting, these are great, I will try to get around to watching all of them...........

Only problem with watching for these retracements, OK for 'normal' markets, but have you seen the AUS - USD movements lately? No way to catch those moves, just jump on and get some of the ride!

[YourTradingCoach]

Hi Harley04,

Glad you like the videos.

Yeah, it's been a wild ride for the Aussie Dollar, and anyone trading the one timeframe (eg daily) would have had to take the entry on breakout or miss it. HOWEVER, those who use multiple timeframes had plenty of opportunity. Dropping to a lower timeframe after breakout can sometimes provide a good retracement back to the point of b/out, with a lower risk entry. Test it & see if it works for you.

[jfisamm]

Entering befor the breakout provides good reward risk rato.The problem is you don't know when and if the breakout is going to occur.....maybe days or weeks !

[YourTradingCoach]

Hi jfisamm,

(1) 'days or weeks' depends on timeframe obviously. I'd die of boredom waiting that long for a move.

(2) You're correct in that a trader cannot 'know', as to 'know' implies certainty. The nature of the markets is uncertainty, so no future movement can be 'known'.

However... (continued in next reply box due to character limitations)

[YourTradingCoach]

(ctd)...it is possible to subjectively assess the likelihood of various probable outcomes. Through a study of price action a trader can identify changes within the nature of the price movement which indicate an increased likelihood of a breakout. These setups can offer a higher probability of a move in the near future, and as you suggest they can pay very well. Don't just see the macro level pattern, study price action within that pattern.

[johto]

Good video :)

[YourTradingCoach]

Cheers johto,

Glad you liked it.

[ZepTrader66]

Nice work Lance!

[YourTradingCoach]

Hey ZepTrader66,

Glad you liked it. Thanks for the feedback.

Cheers,

Lance.

[megahoed]

how do you avoid fake pullbacks, the fakeouts? especially this month, this market had alot of volatility around levels, and wasn't quite orderly. I was wondering, what do you do to avoid being stopped out?

[YourTradingCoach]

Hi megahoed,

First, a trader must accept that being stopped out is always a possibility. Therefore, minimising & managing risk must be a priority. Being stopped out does happen, and in fact the volatility of last week was especially difficult to trade at times.

Second, the video only discusses the setup areas. The entry trigger is based on lower timeframe price action analysis, and this aims to avoid many of the failures. More to follow in future videos, perhaps?

Cheers,

Lance

[mupersan82]

Thank you for the videos. They are very well presented and surpass your own subscriptions in quality.

[YourTradingCoach]

Hi mupersan82,

Thanks for the feedback. Hopefully I can continue to provide videos that are useful for both the novice and professional trader.

I'm glad you found value in this video.

Cheers,

Lance.

[radjune1970]

Thanks for sharing this , very useful information

[YourTradingCoach]

Your welcome radjune,

Glad you found it useful.

Happy trading,

Lance.