How to trade breakouts ?

I use the following rules for my breakouts trade.
1. As a general rule, the more times a line of resistance or support has been tested
the more important the violation will be if it occurs. I generally never trade less
than three/four tests.
2. The time frame between the tests of resistance and support is also important and
generally the longer the support or resistance has been in place, the more valid the
break will be when it comes. A period of months is obviously a far more valid period
than a few weeks.


When looking for breakouts, the longer term monthly and weekly charts should be looked
at rst and the daily chart used for timing.

Once a clear break has occurred, the odds are the trend will continue in the direction
of the break. If the trend reverses quickly, and goes back to the breakout point rather
than continuing, the break is likely to be false. Stops should therefore be at or near the
breakout point.