If u are looking to enter a scrip just before the breakout
what would u look for?
How would u identify scrips just before breakout?

Here are a few pointers
Carefully understand the them and use at ur own discretion
(All comments r compiled from a question i posed)

1/23

Price is testing the same resistance repeatedly since long.
But now in recent times it's forming multiple candles near the same resistance with low volume.
Observe it and see for opposite move.
As soon as u get a positive candle, get in to it.

2/23
1. Volume buildup (vol > when resistance point created) along with, increase in OI, increase in delivery % on HTF
2. On LTF, price stalling around breakout area for at least 1-2hr.
3. No major events.

3/23
Stock reaching breakout LVL with HL-HH
Contraction of price and volume near it especially near 20 days ma.
If there is any breach of the latest HL it should be followed by a bullish candle with good volume.
Left side of the chart has a rally with a very steep slope of ma.

4/23
Number of wide range green bars with high volumes.
If stock is at its ATH then it adds more conviction bcz there wont b supply after that point

Consolidation below the resistance, volume of the candles & strong bullish candle closing at near highs just below the resistance

5/23
Triangle/volatility contraction pattern and gradual reduction in volume.

Relative strength of the index.
Volume Contraction
Supertrend turning positive/Ichimoku Conversion line crosses base line or Price crosses above cloud.
Gain from 52 Week low.

6/23
Stock should undergone consolidation between narrow range multiple times,
Final rally in narrow range before breaking out should supported with high volume moves.

7/23
Wide range bullish candel with good volumes and next couple of candles narrow range or long tails visible at midpoint of wide range candel and volumes should contract.

8/23
1. HH & HL structure on lower time frame.
Above resistance there should not be any important moving average.
2. If there is any consolidation on ltf & if price break down consolidation & that candle if close again in consolidation area will buy on that candle itself.

9/23
Context of the movement before Consolidation i.e. candle and volume bar Size and then fake breakout in the consolidation zone for an entry.
1) HL formation
2) Volatility contraction
3) Buildup near resistance

10/23
1. Weekly Volume
2. How the current Candle formed compare to last 6-8 weeks
3. If able to cross Monthly/Weekly Resistance
4. Recently any stake increased by Promotor/ Others
5. Need to wait for Pull back and sustain followed should close by above BO candle

11/23
Stock must be near ATH or 52High
It must already be in stage 2
The base should be spread out at least over a month
The ATH has been tested at least 1-2 times
Volume contraction on right side near ATH
Favorable market and sector

12/23
Left a demand zone at bottom of range with positive momentum divergence.
An outsider candle at bottom may also be considered as an odd enhancer.
HH & HL should be there on higher time frame.

13/23
Stock outperforming benchmark index
Stock outperforming sectoral index
Volume dry up on small pullbacks

14/23
1. Previous low should not be broken which confirms buyers are active.
2. Many or atleast one long wick candle with less volume in higher low areas
3. Nice consolidation with volume buildup in lower time frame near the resistance.

15/23
1. HH, HL on lower time frame after recent pullback.
2. Rsi greater than 60
3. Volume increasing trend

Consolidation near the resistance.
If the consolidation is tight and over 20ema, it generally explodes.

16/23
1 - Stock being in clear uptrend
2 - Price within a constructive base pattern
3 - higher than normal delivery %
4 - Pocket pivot

17/23
At Demand zone or Supply zone pullback 1st time
Draw a horizontal line and see how many times the stock has reversed from there the more the resistance the higher the probability of a breakout

18/23
How long it has been acting as resistance?
Stock is making higher low?
Stock is contracting well?? I meant volatility
Stock is having more of red or green volumes.

Look for rising volume, at least higher than last BO point.

19/23
When price hits the Resistance falls down and then forms a cup pattern where price consolidates and then moves with Volume expansion on wide range candle.
Also look at the broader market performance, test of supply and shakeout candle for perfect breakout to happen.

20/23
Strong buying vol with reducing or low selling vol
Drying vol during consolidation
Final shakeout to absorb weak longs
Unusual activity by insiders before a big move (Price & Volume actions)

21/23
1: Momentum towards breakout price
2: wide range closing
3: Price holding levels near to breakout for sometine
4: Volume increasing
5: Round number price action.

22/23
1. Consolidation near resistance zone and above 20 EMA without falling.
2. Candle sizes and corresponding volume.
3. Entry can be Fake break down in lower time frame in consolidation near resistance zone.

23/23

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Some thoughts on how big market making firms (eg Jane Street, Susquehanna, Optiver) are structured. Note I have not worked at any of these firms so this is not based on any insider knowledge, just talking to people in the industry and extrapolating a bit.


A “pure” market making operation is based on clipping spreads, ie buy low, sell high, keep inventory low, keep risks (eg greeks) tightly hedged. Skew your bid/offer based on your inventory to try and offload it as quickly as possible without impacting your profit too much.

This kind of trading has enormous risk-adjusted returns (Sharpe > 10, ~no down days) but it’s hard to scale it because your P&L is a function of two things — volume and volatility — that you don’t have any control over.

This is a problem because the costs of running a pure MM firm (mainly infrastructure and employee comp) are increasing and profit margins are decreasing. So many firms turn to prop trading as a way to increase P&L at the cost of some Sharpe.

One way to approach this is to make your price skew dependent on factors other than your inventory, eg if you think the market is going up you skew prices a little higher to encourage people to sell to you and discourage them from buying from you.

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