Why Stocks Breakout

Stocks may break out based on news or events affecting the particular company, but just as often they are companies with new management turning them around, or gossip about earnings. There are certain stocks that breakout fairly frequently. Traders watch closely for signs of breakout stocks. SureTrader’s state-of-the-art platform provides traders with up-to-the-second data and lightning fast execution, both crucial for breakout trading. A breakdown stock occurs when the support level is breached, causing high volume selling.

What is a Breakout Stock?

In a technical stock chart, every stock has a resistance and support level. The former is a level the stock price seems to resist, while the latter is a level the price doesn’t fall beneath. The chart also tracks the trends. Breakout stocks occur when that resistance level is finally exceeded. This triggers high volume trading, generally for a few hours a day. Often, large hedge funds are responsible for high volume stocks, as they buy up particular securities. When trading these top volume stocks, choose a target price on which to exit and make a profit.

What is a Breakout Stock?

Breakout trading is very fast, and requires aggressive action. With a breakout stock, timing is everything. Get the timing right, and ride that wave. Get the timing wrong, and you could end up with a considerable loss. That means you must study a stock’s trends with great scrutiny. With potential stock breakout, you’re looking for stocks whose prices have changed between 10 and 20 percent over the past month. Look for technical charts showing nearly complete flags, triangles or head and shoulders – along with upward price trends. Then act fast to benefit from the initial stages of the breakout – but get confirmation that the trend is genuine and not the so-called “fake-out.” Since ranges are easy to follow, traders must look out for that false breakout. This happens when the stock’s price appears poised to breakout, but ends up staying within previous trading ranges. High volume stock trading offers breakout confirmation, but keep your eye on the charts. Take long positions on stock breakouts when the overall trend is rising, and take short positions when the stock falls below its support level. It’s a basic bull or bear decision.

With breakout stocks, the entry level is clear, but that’s not true of exit levels. Cut losses quickly on any breakout stock. Most traders use the stock’s former support level as the exit price. It’s still a loss, but not devastating.

Trading Breakout Stocks with SureTrader

SureTrader gives you the tools to recognize breakout stocks and conduct breakout trading. Our advanced technical charts offer historical information, trends and momentum, custom-tailored to your individual trading preferences. Learn to trade breakout stocks by using our $100K demo, so that you can practice and refine strategies before risking your money. Once you’ve made successful simulated trades, you can transfer those skills to real trading.

Disclaimer: All information provided “as is” for informational purposes only, not intended as a recommendation to buy or sell. Swiss America Securities, Ltd. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.
Breakout Stock Trend

Breakout Stock Trends

Why Stocks Breakout

Stocks may break out based on news or events affecting the particular company, but just as often they are companies with new management turning them around, or gossip about earnings. There are certain stocks that breakout fairly frequently. Traders watch closely for signs of breakout stocks. SureTrader’s state-of-the-art platform provides traders with up-to-the-second data and lightning fast execution, both crucial for breakout trading. A breakdown stock occurs when the support level is breached, causing high volume selling.

What is a Breakout Stock?

In a technical stock chart, every stock has a resistance and support level. The former is a level the stock price seems to resist, while the latter is a level the price doesn’t fall beneath. The chart also tracks the trends. Breakout stocks occur when that resistance level is finally exceeded. This triggers high volume trading, generally for a few hours a day. Often, large hedge funds are responsible for high volume stocks, as they buy up particular securities. When trading these top volume stocks, choose a target price on which to exit and make a profit.

What is a Breakout Stock?

Breakout trading is very fast, and requires aggressive action. With a breakout stock, timing is everything. Get the timing right, and ride that wave. Get the timing wrong, and you could end up with a considerable loss. That means you must study a stock’s trends with great scrutiny. With potential stock breakout, you’re looking for stocks whose prices have changed between 10 and 20 percent over the past month. Look for technical charts showing nearly complete flags, triangles or head and shoulders – along with upward price trends. Then act fast to benefit from the initial stages of the breakout – but get confirmation that the trend is genuine and not the so-called “fake-out.” Since ranges are easy to follow, traders must look out for that false breakout. This happens when the stock’s price appears poised to breakout, but ends up staying within previous trading ranges. High volume stock trading offers breakout confirmation, but keep your eye on the charts. Take long positions on stock breakouts when the overall trend is rising, and take short positions when the stock falls below its support level. It’s a basic bull or bear decision.

With breakout stocks, the entry level is clear, but that’s not true of exit levels. Cut losses quickly on any breakout stock. Most traders use the stock’s former support level as the exit price. It’s still a loss, but not devastating.

Trading Breakout Stocks with SureTrader

SureTrader gives you the tools to recognize breakout stocks and conduct breakout trading. Our advanced technical charts offer historical information, trends and momentum, custom-tailored to your individual trading preferences. Learn to trade breakout stocks by using our $100K demo, so that you can practice and refine strategies before risking your money. Once you’ve made successful simulated trades, you can transfer those skills to real trading.

Disclaimer: All information provided “as is” for informational purposes only, not intended as a recommendation to buy or sell. Swiss America Securities, Ltd. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein.

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