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My question is does one place a buy stop order at the breakout price to enter or should one wait ..

I am studying P&F charts. I understand that the most common buy signal is the double top breakout buy. My question is does one place a buy stop order at the breakout price to enter or should one wait and enter after the breakout has occurred and then enter a buy order.
Thanks for your attention.
--six
Comments

Best Answer

  • Accepted Answer
    Good question. I don't believe I've ever seen any author (of books about P&F charting) address this question.

    My 2 cents worth (this is what I would do if I were you) would be to split my funds into 2 portions.
    50% would be for "placing a buy stop order at the breakout price to enter" and 50% would be to "wait and enter after the breakout has occurred and then enter a buy order".

    This will help me to understand my own emotional response. Which entry method better fits my temperament.
    My anecdotal observations suggest that buying on the breakout is more reliable and profitable. But it's a real struggle for me to execute and maintain discipline once the trade is executed.

    Simple does not mean easy.

Answers

  • sixsix
    petero1298
    Thank you so much for your thoughtful and helpful answer to my question regarding P&F double top breakout buy signals.
    --six
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