When to trust a breakout — and when to fade it

A breakout is only the start of a story. Here is how we decide which ones to follow.

This article walks through how we think about breakouts on the A-Finance desk, including the rules we follow, the gotchas we have learned the hard way, and the journaling routine we use to keep ourselves honest about each setup.

The setup we look for

We start with a clean weekly chart, mark the prior session highs and lows, and only engage when price has interacted with one of those levels with rejection volume.

Execution rules

Entries on the 15-minute candle close, stop at the structural high or low plus 0.2 ATR, first target at 1R.