Stock traders are curious to find & trade equities that are hovering in a tight trading range. They often look for steps to follow when trading breakouts. These steps are significant to identify the right opportunity at the right time.
You just need to follow them wisely & with enough patience to make money from stock investment. It will help you to cut your losses as well as increase your profits to significant levels.
Once a trading breakout occurs for an equity trading in narrow trading range, you also need to control your emotions to act wisely. Here 8 wonderful steps to handle trading breakouts in securities:
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(1) Identify Right Stock
It is one of the best & most important steps to follow when trading breakouts. A stock trading in a tight trading range is an ideal candidate that can show trading breakout on either side.
You can easily find such potential stocks through research & analysis. You should wisely select stocks that have built strong support or resistance levels over a period of time.
This period of narrow trading band may range from few days to few weeks to even few months. You should remember that longer the time period of a narrow trading range more reliable indicator it will be for the stock.
Once this stronger support or resistance gets broken, a more powerful up move or downfall will get triggered.
- Steps For Trading Breakouts: Shutterstock