An educational #Thread on what type of trades 1 can take & what r the rules for it.

Majorly there r 3 types of trades a trader takes :-

* Breakout Trade
* Breakout Retest Trade
* High risk reward contra trades

Disc. - All the #Stocks discussed are for educational purpose!

1/n

#Breakout Trade!

A Breakout trade is usually a trade where the price breaks a strong resistance/supply level after consolidation. These r considered strong stocks.

To add conviction to our trade we check volumes, RSI, RS etc. for confirmation.

Let's understand with e.g :-

2/n

#ADANIPOWER

It has broken strong resistance level of 135 with strong volumes on daily chart with RSI crossing 70, Prev. swing high which adds more conviction in the trade & makes it a high probability trade.

Suggestion - Add 50% qty on breakout & rest 50% wait for retest.

3/n

Breakout Retest #Trade

A Breakout retest trade is usually a trade where the price breaks a strong resistance with volumes, strong RSI & then retest the same price level with low volumes & RSI not breaking 55 on D which signifies a true retest.

Let's understand with e.g:-

4/n

#timken INDIA

It broke the strong resistance level of 2130 with strong volumes, RSI after long consolidation. After breakout it has retested it with low volumes & RSI abv 55.

Suggestion - Good risk reward here but 1 should keep S.L at breakout candle low i.e 2084 on clbs.

5/n