How to Identify Breakouts in Trading Charts


– I often say in StocksToTrade Pro look at charts til your eyes bleed. You’ll hear almost
every trading instructor say look at charts, look at charts, look at charts. What does that mean and how do you do it and how do you get started? That’s today’s video. (upbeat melody) Hey everyone. Lead trainer with
StockstoTrade Tim Bohen here. Be sure to subscribe to our channel for more videos like this and also ring that bell. Hit the alert bell. We do a bunch of videos every week where we’re talking about psychology, breaking down charts and
we also go live every week and I really want you to
catch those live videos. So ring that bell. Today, we’re gonna be
breaking down a chart, one of the best easily chartable stocks that I’ve seen in recent history. It is ARQL. You see it’s on my screen right here. What do I love about this? This is a very smooth, slow-moving stock. Now, do not misconstrue slow-moving. Slow-moving stocks, slow-moving tickers are great for small traders
and part-time traders. I’m guessing a significant majority of you are probably part-time traders. That’s why you’re looking at these videos, looking to learn. Slow-moving stocks are great because if you gotta leave, if you gotta do the day job, if you gotta pick up the kids from school they don’t make the crazy volatile moves. So, there’s a few concepts
we’re gonna talk about. A lot of newer traders
will strictly fixate on the intraday chart. A few terms just to break down. The intra with an A chart is just today’s chart. You can see on my screen I’ve
actually got a two day chart. I’m gonna break that back to a one day so you can see exactly what I mean. I mean, this is just today. You see pre-market. You see them through the day. We’re roughly two thirds of
the way through the trading day and then you would see after hours if we were here after hours. But this is the intraday chart and that’s what so many
new traders focus on is they only look at today’s information. I want you looking at multiple timeframes particularly the one year, one day chart as well as the one week, five year chart. So, let’s jump over to the
one year, one day chart here and kind of talk about this and why I like this setup so much. So, you can see that this
stock kinda did nothing for most of the latter part of 2018 and earned into the beginning of 2019. Then we get a high volume
gap-up on news in March. They had, I believe, an FDA announcement without pulling from a
memory from a few months ago. Notice how the stock gaps up, consolidates, and then re-breaks out. Consolidates, re-breaks out. Consolidates, re-breaks out. Okay? That shows you… So let’s say you can see this
stock’s hitting all time highs as of today. But let’s say we were tracking this stock, say we missed this initial move and we even missed the second move. So we’re looking at the chart right here. We now know that this stock has a history of breaking out after it consolidates. So this is something that
we’re gonna put on our watch. We know that after it
breaks the previous highs. So in this situation March, it went from 5.50 to seven. Then later went from seven to nine and then now was gone from eight to 11. So remember in charting and in stocks, history doesn’t repeat but it rhymes. These stocks that make multiple moves tend to continue to make multiple moves. So I want you to look for these stocks that have that past pattern of spiking, consolidating,
and re-breaking out. That’s one of the biggest things that’s gonna help you
find the next best stock. So, how do you do that? How do you break that process down? Well you’re gonna do it with your daily screeners. We talk about these in stocks on these YouTube videos all the time. You’re running those scanners to find those big percent
gainers of the day that are closing near the high of the day. That’s back to the intraday chart. You have unusual volume, you have a strong stock, a big percent gainer with news closing near the high of the day. Write all of those down. Then as you can see ARQL is five cents off the high
of the day again today. It’s about ready to break out again. This has been one of the best
stocks of the summer so far. So now maybe you never even traded this. ARQL qualifies. It has news today. 6:27 you can see there’s news. You might not be able to see it but I can see it. You might not be able
to see it on YouTube. Has news today. Closing near the high of the day, breaking out on the intraday chart. Then I flip and I can see
that it is now consolidated for a few days and is
getting ready to break out. Okay? So, use those multiple timeframes. That’s one of the biggest
things you wanna do. You’re gonna find the stock
on the intraday chart. So you’re gonna be… Basically what you’re doing is you’re finding ideas on today’s chart. Then you’re confirming that
idea on the one year, one day and the one week, five year. So, that tells you that
there’s past performance here. This isn’t just a random spiker. Then you flip back to the daily chart, five minute, one day and you
start making your trade plan. That is what we call
using multiple timeframes and that keeps you out of mediocre trades. So many new traders trade
off the one day chart, today’s chart and they
don’t look at the daily and they miss the forest for the trees as the old saying goes. So, hope this was helpful. Let me know in a comment below. Do you use the one year
and the five year chart? Do you strictly stare
at the intraday chart? So I’d like to know. As a day trader, I think use multiple timeframes. What timeframes do you use? Drop me a comment below. Thanks for watching our video. Be sure to comment below with
any trading-related question. We love answering your questions. Also, like and share with your friends and be sure to subscribe to be notified as soon as our next video hits. And if you’re looking to
expand your trading knowledge, don’t forget to check out
all of our other videos and be sure to click the trial below. Check out StocksToTrade. I think it is one of the best, most rapidly-advancing
softwares out there. Be sure to check out our trial.

25 thoughts on “How to Identify Breakouts in Trading Charts”

  1. Do you use the one year and the five year chart? Do you strictly stare at the intraday chart? What timeframes do you use?

  2. Hey Tim! thanks for the video very helpful. I was listening to steven's podcast on daily and intraday support and resistance so im getting my fix today (episode 73). I look at the daily, intraday and usually zoom out to the 5, 10 or 20 year as well. I don't look at weekly candles though, do you find that makes a big difference when looking at LT support resistance?

  3. Good info 👍
    Question Tim, I'm checking out STT and want to add paper money so I can paper trade, in video lesson doesn't show how?
    Thank you,

  4. i don't rely too much on time frames beyond 1 year. particularly because recent news can move these low priced tickers more dramatically. and some times there were reverse splits in the past and that throws some other info at you. i used to trade with these guys but now i trade options and other things i learned from them is look for larger volume bars as the top approaches and keep the level 2 up front and center. i've seen buyers jumping the ask and that's a good indication you're getting a break out and not a fake out.

  5. i follow in options. they also say look at the five yr chart. however, it has not been right this year, some options did not go as plan the options simply walked away from the 5 yr chart and decideed to spike a few months later. i bought something at.o1 122 options nada. now it's climbing. i ain't got the money. so that's 122×100 .01 if it goes to 1 or 2 oh well… anyways i'm rambling and i need to watch your videos and tim's and write. it'd be great if you would add options. but i can always learn.

  6. I use 1Day-1Min and 1Day-5Min when I'm in a trade. 1Month-1Day, 6Month-1Day, 1Year-1Week to plan the trade. Always good to keep the BIG picture in mind!

Leave a Reply

Your email address will not be published. Required fields are marked *