A breakout trade looks great on a chart: clean level break, large extension, increased volume and seemingly no pain if buying or selling through the level. That is why a breakout trade can be so tough; the perceived reward negates the amount of times that markets hold levels and remain range bound.
Two characteristics play a major role in successfully trading a breakout: Firstly, identifying a level that is likely to break, this comes from your chart analysis – perhaps the top of a range or a level that has been tested multiple times. Second comes the Price Action characteristics of the breakout, those subtle changes in transactions that tell you whether the break is on or not, usually you will see increased transaction velocity and a willingness of traders to auction new prices.
In the following video from an AXIA live afternoon debrief session we look at how to identify a breakout level and also consider different ways of participating in the break, whether that be positioning beforehand or taking the aggressive trade through the level. The main focus is on the Jigsaw Replay of Price Action on the break which allows a trader to execute a trade and manage a stop even after missing the initial breakout.
Perfecting this skill not only helps prevent missing an opportunity but also provides a chance to increase size on a trade that has been initiated before the break and maximise your potential gain. This is just one way to play a breakout trade, The Axia Futures Price Ladder course focuses on multiple approaches to momentum based strategies in Module 12 of the Advanced section where there are multiple drills to hone your momentum based price ladder skills.
If you are looking to develop a career as a trader within a professional and successful environment then the AXIA Futures 8 week Intensive Trader Training is the most comprehensive in the industry based upon skill development within the proprietary futures trading environment.