A stock market trading tip

for exit trade

in case of a failing breakout or breakdown

for any swing trading system

This stock market trading tip is one of my personal stock trading secrets. It’s based on several years of active trading.

This stock trading tip can be used if you’re entering a breakout trade. The breakout could hold, but sometimes breakouts will fail. Such a failure is demonstrated by a single reversal of a candlestick . The price during a trading day is trying to move above the resistance level, but it fails. The closing price is again below this resistance level.

A single candlestick with this shape is known as a shooting star (for breakout failure) or a hammer (for breakdown failure).

Look at this example of a failed breakout of BVF stock:

Do not wait, and if you see a negative candlestick, which provides information about a failed break of resistance or support, exit trade immediately.

Do not wait for your stop-loss exit. Based on my stock trading knowledge, 95% of such reversals will reach your stop.

So, it’s much better to leave a trade with a smaller loss than to wait for your stop-loss to be triggered.

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