Last Updated on January 20, 2021 by Mark Ursell
Breakout strategies are one of the oldest and most powerful trading strategies.
A hundred years ago Jesse Livermore was writing (with Edwin Lefèvre in Reminiscences of a Stock Operator):
“Remember that stocks are never too high for you to begin buying or too low to begin selling.”
“Timid people don’t like to buy a stock at a new high record. But I had the history of such movements to guide me.”Lefèvre, Edwin: Reminiscences of a Stock Operator
In this video, I demonstrate my analysis of a classic price channel (Donchian) breakout.
I compare it to a variation that uses the price channel to trigger the entry but then waits for a pullback before entering.
The results were interesting and demonstrating that breakouts are an effective way to trade, but you can improve on the basic entry.
- Berkshire Hathaway
- JP Morgan
- Bank of America
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