iCharts Discussions

[mokalm77]

When the share price is rangebound, when the range is broken, the share price will either go up or go down, that is a breakout for the particular stock.

Mark the points where the shares is rangebound, place one buy order (trigger order) just few points above the range and place one sell order (trigger order) just a few points below the range.

As soon as the range is broken, either buy order or a sell order will be triggered and u can catch the breakout either way and earn huge profits.

Put a stop loss just a few points below the upper range or few points below the lower range because the share price might retrace back to the upper range or the lower range.

If the stop loss is triggered, you will be out of the trade and that will be a false breakout, then trade the other way round because when there is a false breakout, the market changes directions very quickly when there is a false breakout and even then u can earn huge profits even ur stop loss is triggered.

Also use 1 or 2 indicators for ur confirmation.

[NORBE_1958]

since the timing is the problem, to know when the breakout is there , is there a method to know that

[mokalm77]

Suppose if the Nifty futures are trading in the short-term range of say 2500-2525 range, so the upper range of Nifty futures is 2525 and the lower range of Nifty is 2500, after some time (may be on the same day or the next day) the range is sure to be broken, i.e. the price will either break the 2525 level, upward movement, or break the 2500 level, downward movement. So to catch the breakout early in either direction, one BUY order should be placed above 2525 level, say at 2528, and one SELL order should be placed below 2500 level, say 2497, so either way u can catch the trend. As you must be aware of, when there is a breakout the momentum of the price of the share increasing rapidly, and the price goes either up or down very quickly, so in order to catch the trend very early we place BUY and a SELL ORDER in advance, so if the share price breaks out either up or down, u can catch the trend, as most of the people get catch the trend very late and when they get into the trade, the stock starts losing its momentum.


As far the timing of the breakout, in this case Nifty Futures, if the level breaks the 2525 level, that means the breakout is in the upper direction, i.e buying momentum increases; and if 2500 level is broken, means the breakout is in the downward direction, selling momentum increases.

Use of indicators can be useful in guessing what direction the share price or indices are going to move.

In the above case, if the Nifty has reached the 2525 level, and the RSI is moving upwards, there is every chance that Nifty is going to breach the 2525 level and if the Nifty is approaching a 2500 range and RSI indicator is pointing downwards, there is every chance that Nifty is going to breach 2500 level and turn downwards.