Pull The Trigger

At this point you have done all your homework, and thoroughly planned your trade using Breakout Theory. This article assumes that you now have received an alert that the price of the stocks you have charted have broken into new highs and are trading at or above the breakout point.

This is a check list to make sure you have covered all bases before making the purchase to buy.

1. You may have multiple alerts. Several stock that you are following are breaking out at the same time. Choose the most powerful, and the one that has move up most percentage wise.

2. Determine your Entry price / Breakout price.

3. Determine where you will exit if the trade goes against you. What stop loss strategy will you use?

4. Determine position size

5. Is the sector in which the stock you are trading moving upward?

6. How’s the buying volume on the stock you are about to purchase?

7. Are the fundamentals of the stock still growing?

8. Check to see if the Market tone is bullish or bearish. Use Moving Averages to also determine Market tone.

9. If everything is congruent, execute the trade to buy.

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