An Intraday Volume Breakout Strategy with 2-3% Gains
Today we will be looking at an Intraday Volume Breakout Strategy, and how those 2-3% lucrative gains can be mastered with the help of it. Here we will not only look at potential entry points but also exit points for maximum gain.
Intraday trading depends on when you enter the stock, and to find those potential entry points, right click on the chart and click on “Enable Auto SR”.
However, we are concerned with volume breakout intraday trading strategies, and for that we need to understand the situation where the breakout is happening. After right clicking on the graph again and selecting Auto S/R Options and then again on Auto S/R based on current cursor, you can see the resistance lines changing with the cursor.
We can see that there was a resistance breakout with volume which then resulted in a 4.16% spike. But not every volume breakout can result in such gains. To understand it better, look at the figure below, where there is a sideways trend for at least 2 days prior to the breakout.
Considering this stock, we have seen when to enter at 52.6, and how ensuring a prior sideways trend can maximize success. Now, day trading strategies not only depend on when to enter, but also on when to call it a day. Using “Create Custom Scan” button, we can create a custom scan based on “Chandelier Exit” as shown in the screenshot below:
On the left-hand side of our screen, we will find results of the “Chandlr Sell” custom scan as shown in figure below.
However, our focus will be to understand signals based on the chart. Click on “Buy/Sell” option, and configure the sell option by clicking on “Chandlr Sell” just created few moments ago.
You can see Orange Sell signals on the chart, and upon closer inspection you will find the closing price, and the selling point according to “Chandlr Sell” is approximately close to each other. The exit point is hinted earlier than what the close price originally was, giving us an advantage in time.
Now, running the same on ICICI Prudential stock we find that the Chandelier exit is not given, so in such cases we have to exit just before the market closes. Below figure shows 5.23% gain, but no such exit points.
Now let’s find out how we can identify stocks for this intraday trading strategy. For that, we click on “Manage Scans”, and click on Potential Buy Breakouts in the “Composite Scans” tab.
During the day you simply have to monitor this scan in the 5-min and 15-min timeframes (for example) to find stocks that are doing a volume breakout and then apply this intraday trading strategy.
Now, you can also set a “Scan Alert” based on “Chandelier Exit” by right clicking on the stock and selecting “Set Scan Alert”, and get notifications for the sell signals on your desktop as well as mobile, if you are using the Investar Android App.
The blog focuses on the best intraday strategy by identifying potential entry and exit points for day trading stocks. Volume Breakout identification is no rocket science, and it just takes a few minutes to identify it. Till the next blog, trade well!