[arkyuan]

Hi Guys,
  I want to ask about VRAY. As it shows up on the watchlist few weeks ago. I looked at the technical and it looks like a good stock. It breakout all resistance on July 25 with outstanding volume and the volume contracted. I was thinking enter it on July 31 when the price was 12$ or 11.50$ when it start to rise again but then, it went downhill. I was wondering what is the mistake I made here? should I wait a bit longer?
thanks,
ark,

Simply at $12 it had already moved 81% in just four weeks. The entry point needs to be significantly closer to at least the most recent support, so that your risk reward based on where the stop loss should go has the potential to be at least 1:3 Risk:Reward. So don't try to chase, as even an normal pullback from a swing high is anything up to half of the previous move, so in this stocks case that was a pullback to around $10. And even though the volume has been lower than a few weeks back at the very top on the pullback, it is still significantly higher than the weekly average volume in general, as it has been over 2x the average weekly volume for the last two weeks. So again you'd only want to see it with around average volume or less on a pullback, not 2x.

With breakouts try to look for volatility contraction patterns (VCP) imo, or a cup and handle type pattern, as they are much safer for entries. As remember what you could lose should always be your first consideration in any trade, not what you might win. Lose small always.

I hope that helps.

Hi Isa,
   Thanks for the reply it definitely help me understand how to read the chart. I do have few questions regarding to what you said:
   1. when you said most recent support, you meant support level at 6.63$ on the daily chart?
   
   2. How was the Risk:Reward ratio being calculated? 

   3. I remember you said you won't trade any breakout that is 2x 52 weeks ATR? so this case, which resistance level do you use for the breakout at July 25th? The initial breakout of 7.76$ that was at July 3rd or long term resistance level breakout at 10.64$ ? 
thanks,
ark,