Breakout entry, Pullback entry: swing setup examples.

Breakout and pullback conditions for setups.
Before a stock or currency pair makes our breakout “watchlist,” it must satisfy two key criteria:
Stock or currency pair must be in uptrend
Stock or currency pair must have a valid basing configuration pattern.

How define an up trend (for down trend reverse conditions).

20‐day EMA must be trading at or near the 50‐day MA when the stock is forming a base and clearly above the 50‐day MA when in trend mode.  For pullback trades, the 20‐day EMA must be above the 50‐day MA.
-20‐day EMA must be above the 200‐day MA
- 50‐day MA must be above the 200‐day MA
-Both the 50 and 200‐day MAs must be in a clear uptrend for at least a
few months. 
- The price action should be in an uptrend with a series of higher highs
and higher lows in place over the past 3 ‐ 6 months (at the very least).
- Current price should at least be 30 ‐ 40% above the 52‐week low
Trend qualifier – rules for breakout setups in the picures the examples.
rules for breakout setups
rules for breakout setups

rules for breakout setups
rules for breakout setups

rules for breakout setups
Valid basing pattern for breakout entry

- A base (or zone of congestion) is anywhere from 1 month to 1 year in length. For our style of trading, we prefer bases that form in a 1 - 3 month period that find and hold support of the 50-day
MA.
-We want to see “tight” price action in the base, especially during the last two weeks before the breakout.
-A valid base should pullback anywhere from 10 - 30% off the swing high. Once a stock retraces 40 - 50% or more, we begin to question the strength of the uptrend.
We must see a “higher low” form within the base. This is crucial to the pattern. Without a higher low forming, we have no way to set a stop and therefore can not define the risk.
- Volume should be declining during a base, or at the very least, not heavier than average. If there are too many days of heavy volume selling in a base, the base could be faulty.
Main characteristics of a valid base
Main characteristics of a valid base

Main characteristics of a valid base
Main characteristics of a valid base
The Breakout Entry examples.
    Breakout Entry the trigger
Breakout Entry the trigger

Breakout Entry
Breakout Entry

A pullback setup occurs when a stock breaks out from a valid basing pattern and then pulls back for 3 – 7 days:
Pullback setup
Pullback setup

Pullback Setup

Pullback setup step by step
Pullback setup step by step
Reference Deron Wagner

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