In today’s trading world of complex technical indicators, breakout methods seems
comparatively simple. Its simplicity is deceptive, in that it remains one of the most
effective ways of trading, and if used correctly, you will be in on all the major moves
regardless of the market traded. In fact, its simplicity makes it a tool that can be used
by all traders from novices to seasoned market veterans. The logic behind breakouts
is simple to understand and easy for any trader to implement. An additional bene t of
breakouts is because the logic is so simple; traders nd it easy to trade with discipline.
This is not so with many technical indicators, or complex methods where the logic is not
so easily understood. If you are going to trade any methodology with discipline, you must
rst have con dence in its ability to work. This is where the simplicity of the breakout
method of trading is its strength. Traders understand it, and can trade with discipline,
even when faced with a series of losing trades because they know the logic is soundly
based and will make pro ts over the longer term.
