Breakout.box Entry, Trading.advantaget

7/28/2019 Breakout.box Entry, Trading.advantaget

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A Message from author Dan O'Brien

Hi there. As the head educatorand a mentor here at Trading Advantage I am excited to be a part of one ofthe largest schools for traders in the world. Located at the Chicago Board of Trade, Trading Advan-

stage's school is focused on literally honing the skills of amateur traders seeking to be amongst theranks of professionals.

The biggest difference I find between amateur and professional traders is discipline. To master disciplineyou must begin with a core of rule-based trading techniques that shape a non-emotional trading planToday I am pleased to share with you one of those rule-based trading techniques I teach here at Trading

Advantage The Breakout Box Technique.

Dan O'Brien

PS Check out an exciting offer to join our trading room at the bottom of this guide.

Dan OBrienHas had a long, experienced career as a trader, a broker and aeducator. He has a tremendous track record calling trading signals inthe E-Mini S&P 500. Dan has developed all the tools with his over 20

years' experience in the business - top-notch technical acumen, an in-depth understanding of market fundamentals, a disciplined approachto trading and a patient style of teaching.


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There's no secret that when it comes to trading equities, the trend is your friend. While your expectationsmay be that the stock's trend should continue for weeks or months, even professional investors can bewary of entering a market that has moved significantly in one direction.

However, stocks in a strong trending market will occasionally pause and move sideways. This doesn'tmean the trend is over, but instead the stock may be temporarily stopped in a congestion zone. For stockinvestors looking for a place to buy an up trending market or sell a down trending market, the BreakoutBox Entry can be a powerful technique! Using a daily bar chart, the technique will show you where to enterthe market to take advantage of potential trend continuation.

For stocks in a bullish trend, a sideways move can be advantageous because it allows you to enter themarket and potentially capitalize on a breakout move to the upside. Conversely, stocks in a bear marketmay pause for a short time and then continue to move lower.

The entry for the Breakout Box Technique can be seen on a simple daily bar chart and requires only onesimple calculation. You don't need any other complex indicators or complex algebraic formulas todetermine the entry price. Plus, this technique can be used for any publicly traded stock!

There are two ways to use the Breakout Box Technique:

Breakout Box Higher: When the market is in a long term up trend and pauses before apotential rally extension

Breakout Box Lower:When the market is in a long term down trend and pauses before apotential move lower

For this example and for newer and less experienced traders, we teach the Breakout Box Higher forstocks in a long term upward trend. While the Breakout Box Lower can be a powerful trading tool, sellingstock short often involves different margin requirements and the adherence to additional regulations byFINRA. ( )

Here are the rules for the Breakout Box Higher technique:

The Stock must be in a defined long term upward trend. While defining the long term trend is not anexact science, you should look at the stock in the context of its movement over a period of weeksand months. The stock should have been consistently making higher highs and your expectationshould be that this type of upward price action will continue.

http://www.finra.org/Investors/SmartInvesting/ChoosingInvestments/Stocks/

Breakout Box Entry


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The stock will have an inside day, meaning the price range for that trading day will be entirely within

the range of the previous trading session. For example, if a stock on Day 1 has a high of $100 andlow of $90 and on Day 2 has a high of $99 and a low of $95, Day 2 will be considered an inside day. IDay 2 has a high or low that was the exact same price as Day 1, it is NOT an inside day.

Within two trading sessions of the inside day (Day 3 or Day 4) if the market trades 1% higher than thehigh of the inside day, one should look to buy the stock.

Past performance is not necessarily indicative of future results.See full disclosure below.

Goldman Sachs (GS) Breakout Box Higher

Breakout Box Higher Examples

GS stock breaks out of the sideways movement and begins the upward trend in the middle ofDecember, 2011.

The white ellipse on the left shows the inside day on Jan 30th 2012.

A buy signal is triggered if GS trades 1% above the high of the inside day. The high of GS was takenout by 1% on the very next day with further range extension.

The ellipse on the right shows another inside day on March 9th 2012.

The high (plus 1%) of GS was taken out on the 2nd day after the inside day, with further range

extension.


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FAQs about using the Breakout Box Technique

Q: How many shares of a specific stock should I trade when using theBreakout Box technique?

Q: How can I try to limit the risk when using the Breakout Box Techniqueto enter a stock trade?

A: That is entirely up to you depending on your risk tolerance and your account size. The trading methodswe teach instruct that you should never risk more than 2% of your total account size on any single trade

A: Our methods teach that you should always place a protective stop when trading any type of stock. Theamount of the stop should be a dollar amount you determine depending on your account size, your risktolerance, the price of the stock and the number of shares you are trading. We also teach that you shouldmove your stop higher as the stock prices moves in your favor to lock in potential profits.

In conclusion...The Breakout Box Technique is a way to implement a technical strategy to instill discipline in your tradingIf you are interested in learning more then the offer below could be the best trade you make today Iwould like to extend to you a free lesson in our Beyond Buy & Hold Signal Classroom. Take a look at thedetails below and sign up for this limited time offer.


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Dan O'Brien and Trading Advantage would like to offer you theopportunity to take part in a free one-on-one Beyond Buy andHold Signal Classroom Lesson. This preview will be offeredat no charge to the first 20 individuals that contact us viaphone or e-mail.

*Past performance is not necessarily indicative of future results.

Learn from professionalTrading educators

Learn our most powerful signalsindicators and techniques

Watch ourReal-Time signal calls

Your FREE Preview and Lesson will include:

Beyond Buy and Hold SignalClassroomSpend time watching our live charts andcustom indicators in real market conditions.

Trading AdvantageTechniquesGet access to free proprietary techniquesand instruction

Insider KnowledgeSee the current stocks our educators arewatching from their revolving list of equitiesthat meet the signal criteria.

Swing TradingLooking for an alternative to buy and holdtype investing? We will teach you importanttechnical indicators.

This is a no pressure lesson and preview. At Trading Advantage we believe that you should be able to trybefore you buy. You are in no way required to purchase any products or service from us, but if you likewhat you see...We are happy to review full mentorship programs and pricing.

Scheduling will be on a first come first served basis. YOU MUST CURRENTLY TRADE ORHAVE A STRONG INTEREST IN TRADING EQUITIES


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TRADING RISKS

The risk of loss in trading securities can be substantial. You should, therefore, carefully consider whethersuch trading is suitable for you in light of your circumstances and financial resources. You should be

aware of the following points:

(1) You may sustain a total loss of the funds that you deposit with your broker to establish or maintain aposition in the securities market, and you may incur losses beyond these amounts. If the market movesagainst your position, you may be called upon by your broker to deposit a substantial amount of additionamargin funds, on short notice, in order to maintain your position. If you do not provide the required fundswithin the time required by your broker, your position may be liquidated at a loss, and you will be liable forany resulting deficit in your account. (2) Under certain market conditions, you may find it difficult orimpossible to liquidate a position. This can occur, for example, when the market reaches a daily pricefluctuation limit ("limit move"). (3) Placing contingent orders, such as "stop-loss" or "stop-limit" orders, wilnot necessarily limit your losses to the intended amounts, since market conditions on the exchangewhere the order is placed may make it impossible to execute such orders. (4) All securities positions

involve risk, and a "spread" position may not be less risky than an outright "long" or "short" position. (5)The high degree of leverage (gearing) that may be obtainable in securities trading because of marginrequirements can work against you as well as for you. Leverage (gearing) can lead to large losses as welas gains. (6) You should consult your broker concerning the nature of the protections available tosafeguard funds or property deposited for your account.

ALL OF THE POINTS NOTED ABOVE APPLY TO ALL SECURITIES TRADING WHETHER FOREIGNOR DOMESTIC. IN ADDITION, IF YOU ARE CONTEMPLATING TRADING FOREIGN SECURITIESYOU SHOULD BE AWARE OF THE FOLLOWING ADDITIONAL RISKS:

(7) Foreign securities transactions involve executing and clearing trades on a foreign exchange. This is

the case even if the foreign exchange is formally "linked" to a domestic exchange, whereby a tradeexecuted on one exchange liquidates or establishes a position on the other exchange. No domesticorganization regulates the activities of a foreign exchange, including the execution, delivery, and clearingof transactions on such an exchange, and no domestic regulator has the power to compel enforcement ofthe rules of the foreign exchange or the laws of the foreign country. Moreover, such laws or regulations wilvary depending on the foreign country in which the transaction occurs. For these reasons, customers whotrade on foreign exchanges may not be afforded certain of the protections which apply to domestictransactions, including the right to use domestic alternative dispute resolution procedures. In particularfunds received from customers to margin foreign securities transactions may not be provided the sameprotections as funds received to margin securities transactions on domestic exchanges. Before youtrade, you should familiarize yourself with the foreign rules which will apply to your particular transaction(8) Finally, you should be aware that the price of any foreign securities and, therefore, the potential profitand loss resulting therefrom, may be affected by any fluctuation in the foreign exchange rate between thetime the order is placed and the foreign securities are liquidated.

THIS BRIEF STATEMENT CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHERASPECTS OF THE SECURITIES MARKETS.

HYPOTHETICAL PERFORMANCE RESULTS

WHERE DESIGNATED AS "HYPOTHETICAL PERFORMANCE RESULTS," THE RESULTS SHOWNARE BASED ON SIMULATED OR HYPOTHETICAL PERFORMANCE RESULTS THAT HAVE MANYINHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. UNLIKE THE RESULTS


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SHOWN IN AN ACTUAL PERFORMANCE RECORD, HYPOTHETICAL PERFORMANCE RESULTSDO NOT REPRESENT ACTUAL TRADING. NO REPRESENTATION IS BEING MADE THAT ANY

ACCOUNT OR TRADE WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSESHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICALPERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANYPARTICULAR TRADING PROGRAM.

BECAUSE THESE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVEUNDER-OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORSSUCH AS LACK OF LIQUIDITY. SIMULATED OR HYPOTHETICAL TRADING PROGRAMS INGENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OFHINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT GENERALLY INVOLVEFINANCIAL RISK AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FORTHE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TOWITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OFTRADING LOSSES ARE MATERIAL POINTS THAT CAN ALSO ADVERSELY AFFECT ACTUAL

TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS INGENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICHCANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICALPERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADINGRESULTS.

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Breakout.box Entry, Trading.advantaget