If you know me, you know how much I love a high-quality, high-probability setup.
When I see one of these patterns, I know the odds are in my favor for success.
One of these reliable trades, which only shows up on Mondays, has been delivering huge gains lately.
I call it the Monday setup, and it can move fast!
We’re talking about moves that can deliver more in one morning than most people see in a month!
And right now we’re offering the Monday setup for just $7!
That’s an 85% discount off the regular price.
But this special offer is only available for a limited time…
So, check it out ASAP in my video tutorial below.
There’s one setup that I may not mention as often as the RCT or the Morning Fader, but it’s just as powerful.
It showed up yesterday to give a massive gainer from the day before a second day to run.
Let’s talk about it today…
Table of Contents
What Is Breakout Trading?
A breakout happens when a stock pushes above a key resistance level, usually one it hasn’t been able to break through before.
The goal is to identify the setup early and catch the move as the stock breaks through resistance and starts to run.
Done right, breakout trading lets you ride the momentum instead of chasing it.
How Breakout Trading Works
Spotting a breakout is one thing. Trading it properly is another.
You’re not just buying random spikes…You’re stalking the setup.
That means:
- Watching the chart
- Recognizing price consolidation
- Identifying key levels (support/resistance)
- Planning your entry, exit, and stop
Don’t chase. FOMO kills traders…
And don’t hold too long. Stick to your plan.
Key Concepts You Need to Understand
Support: This is the price level where buyers step in and hold the stock up. If the stock holds support during a consolidation phase, it may be prepping for a breakout.
But if it breaks below support and keeps dropping? Walk away.
Resistance: Resistance is the level a stock must break to confirm a breakout. When a stock consistently knocks on the ceiling, that’s your signal that it could soon blow through it.
Once it does, that former resistance flips to become new support.
Breakout Trading Indicators
Here are the indicators I watch for:
Volume: Volume is everything, but especially in breakout trading.
A breakout without volume is probably a fakeout. But a breakout with volume? That’s fuel for the fire.
Volatility: Breakouts usually come with big price swings.
It can work in your favor, but you have to respect it. As much as it can work for you, that same volatility can push a stock in the wrong direction in the blink of an eye.
Support/Resistance Levels: When a stock keeps testing these levels, it’s building pressure. It’s kind of like a powder keg ready to explode…but in a good way.
A clean break above resistance with strong volume? That’s your breakout.
New Highs: When a stock makes new daily, multi-week, or multi-month highs, it attracts the attention of other traders, and that means more volume.
Breakouts often keep going until the next resistance forms. That’s why new highs matter.
Chart History: Breakout trading isn’t about predicting but about recognizing what’s already happening.
Former runners with a history of clean breakouts are your bread and butter. If a stock has done it before, it’s more likely to do it again.
Fast-moving stocks demand a robust trading platform. It should feature real-time data, charting, technical indicators, alerts, and more.
My top pick and the one I use every day is StocksToTrade.
STT has everything you need to stay ahead of the game.
And right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17!
A Real Breakout in Action: CTRL Group Limited (NASDAQ: MCTR)
MCTR had an amazing two days this week.
On Tuesday, it caught Oracle’s attention…
We got a green buy signal at $8.46 per share, and the stock ground upwards all day to reach a high of $33.69. That was a 289%* gain!
If that’s not proof enough of why I absolutely love the Oracle tool and use it every day, you should see it in action during one of our free live daily webinars.
MCTR wasn’t done yet. By using its Thursday morning resistance level of $41.22, I was able to determine an entry price for a breakout.
And break out it did!
After passing through $41.22, MCTR spiked to a high of $56.089 for a quick return of 36%*.
Take a look at all the action…
MCTR 2-Day, 5-Minute Candles Chart; SteadyTrade
My Final Thoughts…
Breakout trading works…when you do it right.
Here’s your checklist:
- Study your charts
- Define support and resistance
- Wait for volume confirmation
- Set a trading plan with entries, exits, and stops
- Don’t let FOMO control your trading.
You don’t have to be early, and you don’t have to catch the bottom.
You just need to spot the breakout and then trade it with discipline.
Smart traders wait for confirmation… and then strike for a win!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
Learn more about technical analysis in my blog post.
Here’s another strategy that relies on support and resistance.
See this other massive runner from Friday and how I caught it.