Signs of Strength in a Breakout

This chapter discusses different signs of strength in a breakout. The minimum criterion for a breakout to be successful is that a trader could enter on the breakout and make at least a scalper's profit. The strongest breakouts will result in strong trends that can last for dozens of bars. There are early signs that increase the likelihood that a breakout will be strong enough to run to one or more measured move targets, such as, if a bull breakout has a large bull trend body and small tails or no tails then it is more likely to succeed. To a trader, the breakout implies strength and a possible new trend. It follows a period of two-sided trading where the bulls and bears both agree that there is value and both are willing to take positions.