It does take a lot of patience to be successful in a break out stock trade. Unfortunately, most stock traders are taught differently. They are trained to sell at low levels and buy at high levels. What one needs to keep in mind is, there isn’t any perfect way to trade and to make a perfect entry.
A stock trader needs to consider these factors in order to reduce or eliminate their failure rate:
• the current trend
• the strength of the supply and demand
• the intraday trading’s time of day
• the swing or position trading’s time of year
If you are a stock trader, you may have already bought a book about trading. You will notice that most of these books teach buying the breakouts of resistance. However, if you analyze it, if all traders buy the breakout, then there won’t be any traders left to help increase the prices. And that is the reason why a lot of stock market breakouts have the tendency to fail.
If the traders buy stocks on the breakout, the prices will freeze since there won’t be any trader left to buy and increase the stocks. This fact may lead to panic selling.
Wait for the retest. This is the only solution for a weak trader. The moment that they have regained their confidence in trading, they would most likely try trading once again and strengthen the trend as they acquire profits.
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