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Breakout Trading

The document outlines steps to calculate breakout levels for day trading using fractions of the previous day's trading range. It describes calculating upside and downside breakout levels based on the current day's trading range falling below, between, or above two markers. It recommends entering positions above upside and below downside breakout levels with targets of 0.7% and stop losses of 0.8% or if the price moves against the position for over 10 minutes.

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Pravin Yeluri
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32 views1 page

Breakout Trading

The document outlines steps to calculate breakout levels for day trading using fractions of the previous day's trading range. It describes calculating upside and downside breakout levels based on the current day's trading range falling below, between, or above two markers. It recommends entering positions above upside and below downside breakout levels with targets of 0.7% and stop losses of 0.8% or if the price moves against the position for over 10 minutes.

Uploaded by

Pravin Yeluri
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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Step 1: Find out the previous day s high and low.

Step 2: Find out current day s high and low at any point of time.
Step 3: Note down 2 fractions (0.45 and 0.75)
Step 4: Find the range of previous day. (Previous day high Previous day low)
Step 5: Multiply the range for previous day with the two fractions from step 3.
(0.45 and
0.75). Mark this result as MF1 andMF2.
Step 6: Now find current day s range (Today s high
Today s low)
Step 7: Find out whether current day s range is below MF1, between MF1 and MF2 or
above MF2.
Step 8: If current day s range is below MF1, then breakout levels are
Upside Breakout = Today s low + MF1.
Downside Breakout = Today s high
MF1.
Step 9: If current day s range is between MF1 and MF2, then breakout levels are
Upside Breakout = Today s low + MF2.
Downside Breakout = Today s high
MF2.
Step 10: If current day s range is above MF2, then DO NOT TRADE.
Step 11: Once we know the breakout levels, we can buy above Upside Breakout and
sell below Downside breakout.
Step 12: Target should be 0.7%.
Step 13: Stop loss should be 0.8% or if the underlying is trading below our buy
price or above our sell price for more than 10 min, then square off the position
.
Step 14: This trading system is best suitable for those who can trade in multipl
e stocks and are very active in trading. One should not expect more than 1% from
this system.
Step 15: You can find the breakout levels for free using the below website
Breakout Calculator

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