High-Volume Breakouts by Ken Calhoun
In this final article in a series we’ve been presenting on breakout trading strategies from this professional daytrader and educator, we look at the role that volume and price-action breakout patterns play in confirming entry signals.
As many traders know, the two most important technical trading signals are price and volume. By combining price-action breakout patterns with specific volume confirmation signals, you can identify strong trading entries as they’re moving to new highs.
You can spot high-volume breakouts whenever volume increases significantly—that is, at least 30% higher than their average trading volume—along with a move up in price. These are important because strong volume indicates institutional buying is at work, which can help you find good entries. In this article, I’ll show you how to find high-volume breakout patterns when you’re entering your trades...