RE: Beginners Questions
(2013-05-18, 09:32 PM)isatrader Wrote:(2013-05-18, 09:24 PM)bluemosaic Wrote: Sounds like I am trying to over complicate this analysis then. So what should I be looking for when assessing breakouts and pullbacks with trend? Just increase of volume ?
On a trader breakout, according to the method you should be looking for a strong volume day on the breakout. Typically at least 3 times the recent average volume on the daily chart and a strong close above the breakout level near the high of the day ideally. You also want to see the weekly volume at at least 2 times the previous four weeks average volume.
Pullbacks are the opposite, in that you want to see the volume decrease when it pulls back towards the support and stabilises.
Yeah thats the tricky part, making your entry at the best pullback. So know I know to wait for a pullback near the support and stabilization. However, how long is the stabilization period usually? Does the pullback entry matter for one who is doing this investor method?