How to Trade Breakouts - Alibaba, Baidu and Roku
Trading breakouts are traders favorites, if your entry is right immense profits can be made in short period of time. As a trader, the first thing you look, always, is identify pivot support and resistance. Keep in mind, if your outlay support and resistance is wrong, the overall outcome will be wrong too. For my personal style, I use 90% price action pivots, 10% for other tools, RSI, Volume and MACD. Like I always say on my blog, there is no right or wrong strategy as long as you are profiting. Your brokerage statement should be the only judge of your trading approach strategy. Below are some my of my previous breakout chart:
Alibaba #BABA and ROKU - For this trade I used combo approach. Pivots + Positive news catalyst. Note: before the news was announced, BABA was trading under 20dma and 50dma, which is usually a SIDELINE signal for active traders. BABA was +3% on premarket on the news and opened at +2.32%, spike higher to 3% and pulled back, that was our entry triggered on 1st pullback, then sold at 178.48 or BABA +3.46% intraday at the time of the exit. I booked profit for the reason that AliBABA has rarely move past 3% intraday, profit is profit and grateful for booking that gains!
ROKU bullish set-up was intact, it was above 50dma before the news announcement.
Baidu I noticed and saw the strength early morning* See notes http://www.precisiontrade365.com/?p=24630
The profit returns- BABA +56%, BIDU +67%, ROKU +91%. My personal threshold target for Option trade is 50% return.
Note: The trade strategy can be executed via commons as well, its up to traders choice of how you choose to execute the trade.
Twitter: @ Kris_tin27