Since the world ended in 2008 breakout traders have been making a some serious change. All the money is made at the beginning of the bull cycle. The trick is not to predict what will happen, but stick to a plan that keeps your losses to a minimum. The rest is automatic. Some traders were scaling their risk levels down to 1% and taking shots at the breakout during the 2009 -2010 trading sessions. Volatility was quite high, stops had to be placed wide, and position size was reduced to accommodate the volatility.
It’s no secret that all that momentum is coming from the tech sector. In the next few years technology will be in the spotlight as IPO’s and the whole smartphone / app boom is still in full swing. Big money will still flow into growth stocks, and the Fed’s easy money policy won’t be pulled back until things are too hot to handle. That’s a presumtion that history repeats itself.
Super starts like AAPL, NFLX, and QQQ index is all you really need to follow. Buying volume remained stable throughout the Apple split, tech index showing no signs of pulling back. Usually there will be hugh volume spikes and high volatility on the ATR indicator when the market tops out. No sight of large blocks being unloaded at the critical price levels. Next stop Nasdaq 5000. That’s a price level that will be interesting. It was the peak of the Dot Com madness.