What do you consider a "properly constructed breakout?"

What we mean by that is a breakout that is preceded by a flag pattern, consolidation, or a clear support (or resistance) area.

The chart patter should be neat and tidy, and not regularly be subject to gapping or huge daily ranges.

This should be accompanied by at least a couple of the Big Money Footprints

For any trade we need to know exactly where we're going to enter as that will set up the entire trading plan for us., risk management, and profit target.

If we mess up the entry, it makes the entire psychological process of implementing the plan very difficult.

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The trades I have put on have not worked, I’ve made some losses, what am I doing wrong?
The only way you can lose money with these methods (if applied correctly) is on a false breakout. In other words, you get triggered into a trade, and then it retraces and stops you out before P1. This scenario is highly unlikely if: A) The flag or ...
If the entry price of the flag or consolidation is hit, but then the market just starts moving sideways not hitting either entry or stop loss. Is there a point where I can say this is not the typical flag trader trade and just exit?
Yes, it's typically where it stops being a flag or consolidation, becomes range bound, and other opportunities look better. Also, watch to see if the OVI remains in the direction of the dominant trend, and the presence of Big Money Footprints, ...
Is it normal enough that after a trade is filled that it comes back into the flag (bull) and bounces along like that for quite a few days before it thinks about going back up through the original buy stop order level again?
This is something that can happen. Ideally when the stock breaks out it keeps going, takes out our first profit target and then some more on top, which you manage by use of Guy's Dynamic Trailing Stop. When the markets are breaking out big time ...
How do we know that a flag has formed fully and that a breakout is imminent, i.e how many candlesticks denote a typical flag?
The flags (consolidation patterns) we like are generally 3-4 bars/candles (days) long. Sometimes they can go for a bit longer, but that’s a good ballpark. We’re looking for easily recognisable, neat, and compact flags or consolidations, where the ...
You mention about Profit Target of a 1:1, then for actual trading you taking a 1: less than ½ ratio. Therefore, it is more risk than reward ratio, How do you justify this of being conservative, won’t I be bankrupt too soon?
This is a common fallacy. Just because a trade seems to be imbalanced as to risk/reward, that's not actually the important thing - it just sounds good in marketing material and in seminars. But what does it actually mean? Nothing! The key is what ...

What do you consider a "properly constructed breakout?"

What do you consider a "properly constructed breakout?"

Related Articles

The trades I have put on have not worked, I’ve made some losses, what am I doing wrong?

If the entry price of the flag or consolidation is hit, but then the market just starts moving sideways not hitting either entry or stop loss. Is there a point where I can say this is not the typical flag trader trade and just exit?

Is it normal enough that after a trade is filled that it comes back into the flag (bull) and bounces along like that for quite a few days before it thinks about going back up through the original buy stop order level again?

How do we know that a flag has formed fully and that a breakout is imminent, i.e how many candlesticks denote a typical flag?

You mention about Profit Target of a 1:1, then for actual trading you taking a 1: less than ½ ratio. Therefore, it is more risk than reward ratio, How do you justify this of being conservative, won’t I be bankrupt too soon?