Tony's breakout patterns

...cont'd discussion about How to Take Money from Wall Street: Learn to Profit in Bull and Bear Markets

Most other books on “how to trade” deal with setups for entries. Tony’s setups for entry into a new position are all breakouts from patterns. Patterns he looks for breakouts from include: Double Bottoms, Double Tops, Head and Shoulder, Reverse Head and Shoulder, Triangles, Flags, Hanners, Shooting Stars, and Doji’s. Tony says he always takes all or part of his new position in anticipation of the pattern completing and does not wait for the breakout. He says that he uses a stop loss order in the direction opposite of the breakout to abort the trade with a small loss if the the breakout doesn’t happen.

There's nothing new about the patterns that Tony uses. There's plenty of literature on them in other books and all over the Internet.

The book’s specific strategies are of the “Swing Trading” type where the time between exit and entry is a few days. Also, Tony likes to exit half his position when price reaches a predetermined target (as opposed to letting the entire position run with a trailing stop).

...continued tomorrow...

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