A Simple 2023 Trading Strategy

I'm going to show you a simple strategy that I'm using this year to help grow my account and I'm going to go into detail on how to find it how to set up the plan and where you're going to stop out where you're going to enter and not be faked out let's get into it the strategy I'm going to go into is called the breakout strategy and it's not as simple as people say that just buy the breakout because if you've heard that before you probably tried it and you've probably taken a ton of losses because you've been faked out it breaks out and fails and how do you determine if it's an actual breakout why don't we go into detail here share my screen illustrating what we're looking for first and then I'm going to dive into actual charts and show you it in action and then show you a live trade that I actually took and recorded the trade live so you can see it live and I'll give you commentary and my thoughts and what I was thinking let's get started so for the breakout what I'm looking for is simple I'm looking for a stock that couldn't break a prior high and it finally breaks that is usually as far as most people go to when they're sharing the breakout strategy and this is very frustrating because if you're a Trader and you've taken this entry there's been a lot of times where it just does that and you want to avoid that and you're probably asking yourself how do I avoid all of these fake outs this breakout strategy does not work the breakout strategy is one of my favorites because it works and when it does work it works very very well but you have to be patient and wait for the right one now what does that mean I'm going to show you a different examples here there's one example where if it just breaks out and it's from a base let's say this base is one dollar and it breaks out four dollars if that happens that's just a straight breakout you'd never want to enter those those are not real breakouts for this strategy that I'm explaining do not Chase do not get in because what's going to happen more times than not it's gonna just fail so you do not want to be that Trader who gets in when it right who gets in right when it breaks out at any cost doesn't matter where it came from you always have to ask yourself the question where did this stock come from ideally it does this so now let's say this is a dollar and this is a dollar 25 now you have a clear risk reward you're risking 25 cents and you get in a dollar 25 and you can ride it up to two dollars to three that is what you're looking for that's one ideal setup now there's a lot of times that doesn't happen where it does this then it breaks out and let's say it's one to two well that's not the best risk reward you're gonna have to risk all the way down here and you could easily fail it's kind of just going straight up instead what you want to wait for if it does this is you want to wait for this instead you want to go here and it breaks you want to wait for it to pull back so when it pulls back is not where you're gonna enter right away unless you already have an idea of where you want to risk if you know you want to risk here and it's a dollar and you only and it popped up to let's say two dollars and this right here was a dollar fifty well now you're risking 50 cents if you get in here to make 50 cents that doesn't make sense but let's just say it moves up here and then comes down and this is five dollars and it comes down to two and you want to enter here and this is a dollar you're risking a dollar now to make three dollars this makes sense I will take that trade this is how it's not black and white you have to evaluate the trade you need to see the pattern the breakout then you make sure the risk reward is there meaning where am I wrong where am I going to stop at it where is my profit Target the prior highs if that high is too close to where you're wrong and it's inverted don't take the trade if it's one to one don't take the trade you need at least two to one or three to one so those are a couple examples of what you might see now let's go into the chart so you can see this happen breakouts can be found in many time frames in this instance we're going to use the hourly just because it's easy to see for illustration showing you but there are breakouts in smaller time frames like as you can see here here's a breakout here that worked very well if you look at this area this is a breakout for the past week you can see that here so you can see this in multiple time frames how you trade it as I explained earlier while I was illustrating it's the same plan and how I trade it with just different time frames I just want to show you a big picture these breakouts because it's easy to see on the eyes especially when you're learning so if you can do the high higher time frames they're also typically the stronger breakouts that's another big tip the higher the time frame the stronger the move usually nothing's black and white it could easily fail it could easily be weak so just know you could use this on the 5 minute 10 15. I prefer the daily the hourly when I'm looking for these big breakouts so when I'm finding a breakout like this what we're looking for is an area that's been tested at least three times here's one time here another another and a whole consolidation this is super important multiple touches is what I'm looking for if I zoom in the 15 minute and we see the breakout we immediately break out and then we pull back now this is important when we get the pullback I will be entering in this pullback even though it broke out and pulled back why am I doing that the reason I'm going to do that as I explained earlier sometimes it'll break out and pull back one thing I didn't show you which I'm going to show you right now is we'll have this example where we have the breakout setting up we break out and pull back this right here signals that it did break out especially if we had multiple touches that's very important to me if we pull back and it's coming to this risk area still risk rewards important and it's a good risk reward to this prior High I'm getting in risking this low and riding it back because breakouts are not perfect they don't just break out all the time and run sometimes they break out look like they're going to fail consolidate and go you need to understand that so getting back to this when it breaks out this is confirmation for me we have good volume behind it we're breaking out and we're pulling back into a key support area that was acting as resistance this is very important because now I can get in in this area because I can get in in this area and have tight risk and if I do that this is going to change the risk reward because now I can take profits up here if I get in at 197 let's say 198 and I risk prior below this Wick at 197.50 it's only 50 cents risk and it goes up to 203 dollars that's a huge risk reward so that is what I'm looking for they're not always perfect and if we continue this play and we play it out this thing actually continues even higher so you can actually ride this breakout even further if you want to but the idea is look for the good risk reward now if you're someone who's like you know what Alex I don't want to enter here because I feel like we failed this breakout that's fine you don't have to you can wait for it to reconfirm we broke out for a second time here and now in this pullback you can risk here and get in here and then ride it back up so so there's many ways to play it but you have to have the general idea that nothing is perfect and that you have to be patient for the pullback that's super important the pullback is very very important so here's carvana so here's another example on carvana what you'll see is you will have major Supply determining which way is it going to go we choose a Direction so we have tons of Supply up here means major resistance we get a pop-up failed so now we know there's a resistance area right in this area it's very important to note when it fails we consolidate come down then push back up and we fail again this is key we have multiple signals I have a failure here which is a supply Zone I have a failure and a touch I have a failure on another touch now I'm interested so when we start to break out I want to be a part of this move look how strong this move is I want to take this time to say thank you to our sponsor Cobra trading Cobra trading is the go-to broker for day Traders and short Sellers and I'm not the only one saying this in fact benzinga a awarded Cobra trading as the go-to broker for short selling they have a heavy focus on Direct Market access order routing so you have the fastest execution they have some of the best locate prices and availability they also have amazing customer service I've experienced many different Brokers and it's why I use them every single day and why I'm proud to have them as our sponsor sign up now by clicking the be the trader referral link below and earn one free month of software with Cobra and 25 off all commissions now let's get back to the show now let me show you on a smaller time frame what it actually looks like so when we zoom in on the 15 minute and we go ahead and see the action we'll see that breaks out right away and just goes a straight breakout which I explained earlier if you see a straight breakout what do we do we do not Chase so that will be very dangerous where are we risking we get in here we don't know where it's going to go and we're going to risk this 10 area so that's two dollars of risk and we zoom out in the time frame here we're gonna have to take profits at this prior support level which is 13. so if we got in at this twelve dollars and we're getting out 13 that's a dollar upside because we can't predict it's going to take this move remember I don't want to do hindsight trading here we cannot predict that so we have to risk two to make one makes no sense so we're gonna go ahead and let it go without us and then look what happens we get a pull back this is what I want you to see to get this pullback at this key breakout area and now what are the prior highs this 18 level and then we can even say the 16 support area that is now going to act as resistance if that that's the case and we get in at this twelve dollar Mark oh let's just say we get in at 12. I would personally risk this prior low right here on this 15 minute candle where it Wick after breaking out and pushing back down then pushing back up that shows me there's support there and Confirmation you zoom out there's definitely resistance that is now acting as support we zoom in if you get in right here and at 12 you risk 1150 let's say 50 cents that's a major risk reward if you did not risk that and you got in at 12 and you risk 10. that's still good risk reward you're risking two dollars to make 13 14 15 16. that is great risk reward still and if it continues to go to 17 18 the higher resistance you are in a good position this is what I want you to see gotta be patient the strongest skill in trading is patience patience waiting for the entry patience waiting for the exit patients riding the move patience patience patience you have to understand that so here's another example of the breakout and this one is even prettier because we have multiple touches here another touch then we have consolidation failing coming back and when we zoom in here we have a final touch and failure so you can wait for the breakout you can actually put an alert here and say when this breaks out of this area you can actually put an alert on this line here so when it breaks out it alerts your phone or alerts you at your desk so you know it is now breaking out so we're going to go ahead and zoom in and see what happens once it starts to make its move and it breaks out and just goes now once it breaks out it does something very nice here in the hourly actually held the breakout and pushed back up which is something that's very strong because when it pulls back you can again you guessed it and you're on the pullback once you enter on the pullback you can ride it all the way back up and look it gives you another opportunity to enter again so this is what I want you to see not everything is perfect when you're seeing it in a picture but you see that there's different formations different ways it sets up sometimes it has a breakout and holds right away sometimes it breaks out and goes without you for a while then comes back sometimes it breaks out and looks like it's failing but it's just setting up to continue you the momentum at a prior resistance support zone so you have to pay attention to this now I want to show you a trade I took on Nvidia on another breakout that actually ended up not working perfectly and I had a great risk reward and a great trade on it because I followed my plan and I want to explain this because you're going to be in a situation where you enter a breakout and you could still take advantage of the move even though ultimately it fails let me show you how to do that here you'll see there's a key area of consolidation this is a daily chart I love daily charts they're even stronger and here you'll see on this day that we attempt the breakout so we're gonna go ahead and zoom in and on this day we're breaking out I take advantage of this move and trade this entire move I'm going to show you how I do that and what I'm thinking we're gonna go live so that way you can see how it goes so we know the breakout is at 227 right so let's go ahead and show the live video and you'll see I'm already in the trade I'm already in the trade I took a small position we broke 227 we get a pullback but I know that I'm getting in before the action actual setup sets up and here's a little bonus tip if you watch till here type in the comments below saying thank you for the bonus tip if you can find Confluence another area of Interest meaning in this case a trend line is what I'm looking for then you can combine the two a trend plus a support level and a breakout three areas of Confluence to enter the trade successfully when I first got in I got in really small here and took the profits off right away because I knew I had some fomo instead I wanted to wait for some Confluence because once we go straight up to the breakout what did I say we need to wait for a pullback to risk off a prior low and here's the prior low 226 so we get a pullback pop we get a little more confirmation we get another pullback pop and if you see here there's a trend for me higher there's a trend forming a low a higher high a higher low a higher high a higher low so with that Trend forming I want to take advantage of that Trend and the breakout so I start to buy near the trend at 227 risking King 226 we're gonna go ahead and fast forward it and you see I just slowly start entering and I start taking profits where am I taking profits exactly where I told you guys at the prior High I can't predict if it's going to go higher I can't if you do that you could turn a winner into a loser you do not want to do that so I'm taking profits at two to one already and 2.5 to 1 and then when we get another pullback because nothing's perfect we get another pullback what am I doing that might scare a lot of you and it can't it scares me too but I still take an entry because my plan is still intact we have the setup still trending this is a higher low it should be right so I'm entering still risking 226 and then we get a push back up and I'm taking small profits because I do recognize price action just because we know the big picture it's because we have our setup doesn't mean we ignore price action if we see warning signs like a double top here you do not want to just ignore it but I'm still going to trade my plan but I'm going to take profits a little bit more carefully to protect myself so I end up taking some off I took some more off then we get a pop back up to the high a day I'm taking a lot off there but my goal is to ride the breakout because we're breaking out and we're riding this trend nicely and you can see here these Highs are also trending so I'm seeing a channel form so you can see here a channel forming and this is important because whichever way it breaks on this channel is going to pick a direction now we know in hindsight now but I didn't know that in the time I was trading but I was aware that it was channeling and this attempt right here when it tries again this is a fourth time this to me is a triple top quadruple top I need to be careful I take that little position off at 228 because it's breaking a prior low as you can see here and it's about to break the trend which I explained earlier this trend and once it breaks what happens we tank so you could take the position and flip your position because it's breaking the key Trend we're reversing we're filling the breakout now so you could have taken advantage of that and if you're curious on how you can short stocks you can short stocks with mini Brokers one of my favorite Brokers is cover trading because they have a lowest commission the lowest borrows and if you go through me they give you additional 33 off for signing up through be the trader it does help me out a bit but it's going to help you out a ton I'm telling you this is just my personal experience they always take care of you you can find cheap borrows and their customer service is amazing so you gotta check them out and they have a free demo account that you can trade on demo for free so check them out there are links below now here's what you need to understand you can see that even though this breakout failed because it has a plan because I traded it properly because I entered near the key areas I explained earlier I was still able to walk away with a profit this is trading trading is not perfect trading is not black and white it's not perfect it's not always going to be picture perfect there's going to be a lot of changes because the Market's constantly moving it's constantly trading there's tons of emotion there's news that comes out there's things that you didn't know was gonna happen that day because something unexpectedly happened overseas and it impacted the market you need to understand not beans perfect there's some cases where they can be perfect but I'm hoping you saw these examples and you can see that you do not have to be perfect don't beat yourself up and good luck

Channel: B The Trader

Views: 146,664

Keywords: day trading for beginners, day trading strategies, learn to day trade, beginner trading stocks, stock market for beginners, how to trade penny stocks, how to trade penny stocks for beginners, how to make money trading stocks online, day trading for dummies, day trading tips, day trading tips for beginners, learn to trade penny stocks, learn to trade stocks, learn how to day trade penny stocks, day trading strategy, scalping, small account day trading, live day trading

Id: bQWAkgGQJNU

Length: 16min 14sec (974 seconds)

Published: Mon Apr 03 2023