2 Stock Breakout Strategies Analyzed

Last Updated on March 2, 2023 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.

Stocks Tested

  • Apple
  • Microsoft
  • Nvidia
  • Berkshire Hathaway
  • JP Morgan
  • Bank of America


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