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Day Trading: Using Stock Breakouts to Your Advantage
By Andy Swan


Article02.html
Many people in the UK, in fact as many as one in three UK taxpayers have paid too much tax! Greer & Taylor LLP a respected and trusted accountancy service provider has just launched a new website The Taxation People which can be found at www.thetaxationpeople.com the new online tax refund service is dedicated to getting the maximum legal tax refunds for indviduals whatever the circumstances on a `No Win No Fee` basis The Taxation People offer a online service, with a simple and easy to follow process that will guide you along the way as you get the refund you are entitled to. In the `my account` section of their site you can track the progress of your refund application and ask questions using a secure service. I would urge you to check out www.thetaxationpeople.com, where you can enlist the help of the The Taxation People who will get you the Tax Refund you are entitled to. Greer & Taylor LLP will be following up the success of their Tax Refund service The Taxation People by launching a cost effective Self Assesment Service, keep an eye on www.greer-taylor.com for more information.

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Another large garage bill makes you wonder if it`s really worth spending any more money on the car. It has reached the time in its life when it`s started to cost you in upkeep and a newer model might prove to be less bothersome. With no savings to speak of you might be considering one of the Unsecured Loans that a price comparison site has pinpointed for your needs. You looked at the Unsecured Loans a few months ago but haven`t done anything about it since. Using the website that searches for low cost loans is easy as you simply enter the loan amount that you are interested in, the time period that you need it for and the purpose of the loan. The company will also need your employment status and some information about you. An initial assessment will take place for the best quote available and once the loan comparison site has found the best quote, they`ll be in touch with you. Think about the type of car that you could get with one of the Unsecured Loans and how much cheaper it would be to run. You could even combine a few of your other smaller loans into the new one to cut down on your monthly outgoings.


A BREAKOUT is a technical analysis term used to describe the movement of a stock out of a set trading range which continues away from that trading range at an accelerating pace --once either support or resistance is broken. Breakouts can occur over any timeframe, and catching one and riding it is one of the most fun and profitable trading styles out there.

In fact, our Day Trading Systems use this method for profitable trades on an almost daily basis. For example, if a stock has traded in the $6-$8 range for a month or so, moving back and forth between those two levels, a move through $8 to $8.25 could signify a breakout. The same can be said for intraday movement, where a stock finally falls under $50.45 after bouncing off of that support level all day long.

The first step to spotting a breakout is to determine the amount of time that you will want to hold the position. Whatever amount of time that is, use a chart of at least 5 times that length (10 is preferable) to determine your support and resistance points. In other words, if you are looking for a 1 hour trade, look at the last 5-10 hours to see if you can find a trading range and solid support and resistance levels. If you are looking for a 5 day hold, keep an eye on 25-50 day charts of the stock to see your key support and resistance levels.

The best way to explain is always through examples, so look at a hypothetical scenario for DELL:

Say over the last 2 days DELL has seen considerable SUPPORT (price where stock has bounced off of consistently) at 31.55-31.60. RESISTANCE (price where stock has bounced DOWN consistently) is at around 32.10.

Knowing those numbers, we can watch DELL for signs of a BREAKOUT. Any move by DELL under the support level (lower than 31.50) or above the resistance level (higher than 32.15) could indicate that the stock is starting to break out on the next trading day. IMPORTANT: With breakout plays, you play IN THE SAME DIRECTION as the stock moved -- if it went DOWN through support, you should short sell the stock. If it went UP through resistance, you should buy the stock. The theory of breakouts is that once the stock has moved down through a significant support level, it is an indication that buying of the stock is slowing down, and that the stock may accelerate downward very quickly from that point. The opposite is true on stocks that move up through resistance (selling is fading).

FAKEOUTS: Of course, no trading style is 100% accurate. Many times, stocks will move through a support or resistance level and then quickly retreat back into the trading range. ONCE YOU TAKE YOUR BREAKOUT POSITION, set a STOP LOSS just on the other side of the support/resistance level that was just broken. If the stock moves back through that level, the breakout did not occur and there is no sense in holding the position any longer.

BREAKOUTS ARE RARE: Keep in mind that you may watch a stock for days without ever seeing a breakout. True breakouts occur as a stock moves through a well established support/resistance level on INCREASING VOLUME. To find breakouts effectively, it is essential to scan through plenty of stocks and wait for your moment to arrive. DayteradeTeam scans thousands of stocks on an hourly basis, looking for that one opportunity that can bring profits to all of our subscribers!

For more information, news and articles see:

The Taxation People - Article03.html
...in the UK, in fact as many as one in three UK taxpayers have paid too much tax! A new `No Win No Fee` tax refund service has just been launched by Greer & Taylor LLP on a dedicated new website The T...
Visit The Taxation People...

The Taxation People - Article01.html
...! The Taxation People, are a forward thinking online accountancy service that specialise in helping people who might be eligible for a tax refund. They offer a online service, with a simple and easy ...
Visit The Taxation People...

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