Pro-Breakouts

The Pro-Breakouts strategy is designed to get into a LONG position when a stock enters an Uptrend. This strategy gives you:

  • BUY signals: When a trend changes from Accumulation to Uptrend, with strong probability of continuing up-moves.

  • No SHORT signals are included in this strategy.

 

Through this strategy, we aim to ride a big chunk of the Uptrend till it reverses. 

Steps involved in the strategy:

  1. First, it uses certain filters to avoid fake breakouts.

  2. Once those filter conditions are met, the stock waits for a breakout of key resistance level. Upon the breakout, the stock gives a BUY signal.

  3. Finally, when the stock breaks its key support level, it gives an EXIT signal.

  4. A user can input his stop loss and profit booking levels, which are then displayed on the chart. 

Why the need of this Strategy?

Every trend starts with a breakout. Breakout strategies give powerful trade signals that often lead to strong moves in the market, which can last for months and years. 

The Pro-Breakouts strategy will not pick bottoms and tops for you. You always get into a trend late and also get out late. ​Yet, this strategy is designed to eat the meat in a strong up-move by a stock.

In essence, this strategy is intended to enter a stock at point A (see image below), when the stock crosses a key resistance area, fights several pullbacks on its way, 'let the profits run' when the market trend goes up as expected until the market gets exhausted and give an exit signal at point B, in return giving us huge gains. If the trend reverses early after point A, we get an exit signal at point C, to minimize losses. 

How it works
Step 1 - Which stock to trade?

A daily watchlist is sent to all subscribers to inform them of the stocks which are approaching breakouts. You can also enter any stock of your choice to see if it has already given a BUY signal or not.

When a stock approaches its breakout, the system will show the stock's key resistance level as a horizontal green line, at the trigger price. The trigger price is also shown on each bar.

Step 2 - Generation of BUY signals

If the stock meets certain filter conditions and the price closes above the trigger price, a BUY signal is generated.

Step 3 - Exiting the Trade

The trade can last from weeks to months to years. After the receipt of BUY signal, the system will show a stock's key support level as a horizontal red line, below which the system will give an EXIT signal. This trigger level is updated as the stock moves upwards.

 

The user can input his choice of stop loss, profit target and drawdown percentages. The system will show these levels on the charts as and when they are triggered. However, these will not result in an Exit signal until the breakdown happens.

SEBI Registered Research Analyst

Registration Number: INH100007073

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