Learning Byte 10 Steps before I trade a Breakout

#Learningbyte Breakout scrips method:

1. I use the chart ink scanner to filter the long list of scrips making new highs (52W/ATH)
• The filters contain  technical conditions (RSI, Volume, MA etc.,) as well as fundamental conditions (Market cap, book value etc.,)
• Let us call this the First List
2. My posts on Breakout scrips started from 8th Dec I have maintained a master list of scrips from the scanner filter. Next step, all repeats (i.e. scrips which are already part of the breakout from 8th Dec) are excluded and only those appearing for the first time from 8th Dec are included. Let us call this the Second List.
3. This Second List is then further filtered on Quality and Fin Trend (predominantly using Markets Mojo). Let us call this the Third List.
4. Only those which pass the above test (2 Green dots) are then posted on my Facebook page This is the short List.
5. I collect certain details like Rise in last 1 week, market cap, sector, shareholding, PEG Ratio etc. that provides me with a broader perspective of what is happening to the company, its growth prospects etc., I share this detail on the post along with chart.
6. I then look at the chart. This point onwards, each investor or trader would have to form his own criteria. I follow the criteria that I have detailed in Points 6 to 10. From today (11th Jan 2018) I have added Bollinger Band to the technical chart ... this can form as a simple guide to trading the breakout. I look at weekly chart as this gives a better sense and helps in holding for longer periods and reduces the number of transactions.
7. Bollinger Band can be used as a filter to decide whether to trade on retracement or buy on breakout. Technical chartist would be cautious and wait for retracement if there is a candle is full above the Upper Bollinger Band or sometimes if the closing is above the Upper Bollinger Band. If the close is inside the Band, then it may lend itself to further analysis before purchase....
8. If all data provides a good picture, then I look for tailwinds that will sustain the momentum (For e.g. in Rain Industry, the global supply constraint, size of the company, debt restructuring etc., helped to enter this on breakout)
9. If all 8 points provide a comfort level, then position size and purpose of the trade (portfolio, trading etc.,) is decided
10. Finally if the stock trades above the pivot and above the ATP the purchase is finally made.

The above 10 steps has helped me keep out of bad investment decisions, improved the success rate.

PS: The above 10 steps may change and is provided for study and discussion purpose. Kindly use your own criteria and perform due diligence.

Disclaimer :

This blog is for educational and awareness purpose only. The views are intended for discussion and exchange of views rather than an expert opinion. This is not an recommendation to buy or sell or invest in the stock market and derivatives market. Kindly exercise caution and perform your own due diligence before investing in the market, after fully and clearly understanding the risks involved.