OBVious Breakout Strategy

Keep your stock trading strategy simple! Don't over complicate things. If you use too many indicators they will contradict each other and you will become confused and begin making mistakes.

THERE IS NO PERFECT SYSTEM!!!

Find the best setups and don't stay in bad trades.

SETUP

Find trending stocks that on a weekly chart shows a good uptrend.
Is the RSI(14) above 50?
Has the price stayed above the MA(50)?
Is the MACD above the 0 line?
Is the stock visually in a nice looking uptrend?

Find stocks that are presently in a minor pullback.

Draw a line straight across from the highest close of the last rally. This becomes your breakout point. When the price breaks through this line of resistance this is your first signal.

Next, check your On Balance Volume OBV. Draw a line straight across from the last peak. Your second signal comes when the OBV crosses through this line.

Now, we look for signal number two. Take a look at the OBV. I have drawn a line straight across from the last peak. Our signal comes when the On Balance Volume breaks this line.

Next in stock trading school, we will look at how to trade stock. Every good stock trading program has a plan for entering and exiting the trade. Go to entry strategy