I would wait for price to retest instead of going next-bar-market. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. Once trades take place above tha... Read more. Those are my favorite breakout patterns. The Flat Top Breakout (AKA Ascending Triangle) The second best pattern for pennystocks is the flat top break out. We just caught a flat top breakout this morning on FAST. The most bullish pattern we trade. Flat top breakout trading is used by many momentum traders and trend followers to enter a long position on a market that has broken above resistance on a long-term chart. The Flat Top Breakout Pattern. You can play this setup like a bull flag. What I mean by that is that the profit potential is a much greater when you find the flat top pattern on a longer-term daily chart. A flat top breakout is also a well known strategy used by many traders. Trend followers and momentum traders like to stay on the right side of the trend and this type of a breakout on a daily chart is a signal for the direction of the next move. 1. Also, on higher priced stocks especially, fund managers will be scaling into a new position or adding to an existing position. So normally the entry point is slightly above the high in the flat top pattern. Some of the best setups like ROKU soar 20% to 50% within days or weeks after the breakout. In this pattern, there’s no pullback and no downward slope during the consolidation period. The flat top breakout pattern signal is more valid and has the potential for a bigger trend to emerge the longer the consolidation and time frames. The flat top pattern is a narrow consolidation pattern that you can see on the chart above. You can start to develop your own skill at trading flat top breakouts on a simulator without risking real money. Because of their immense buying power, fund managers will scale in over time instead of buying all at once. Typically, it will form after a breakout from a deeper correction (such as a cup and handle). Its relatively flat top means makes it more accurate and reliable to hit balls directly into the goal. Usually, the fundamental and technical conditions are not good enough for us and nowhere near as good as they were for ROKU on multiple breakouts this year. Bull Flag: Bull flags are usually very small and can last for only one day or several weeks. The Flat Top Breakout Pattern. Level 2 data can be helpful for day trading but for the swing trading setups they can be of little use on the very best opportunities. The best opportunities that meet the requirements in the earnings eruptions strategy (most flat top breakouts don’t) tend to move much further. This shows that the market has tried multiple times to break the resistance top but it couldn’t. In this pattern, there’s no pullback and no downward slope during the consolidation period. They are very slightly raised, and sometimes hardly noticeable. Price looks like its pushing through a Flat Top Breakout on the 60 min. 09:51:24 (From TradersWire) Daily Setup Alert. Once trades take place above that flat upper resistance level it is considered a breakout above that level. I am putting my stop around 1.1030 and my target at 1.1369 There are two Bat Patterns as well that are still valid. A flat top breakout can look similar to a flat base pattern but the difference is the flat top happens at the highs of resistance while a flat base can happen inside a long-term trading range and not press new highs. It was also a very clean breakout which is a good sign for the remainder of Q3 earnings season. Once trades take place above that flat upper resistance level it is considered a breakout above that level. Enter your email address and we'll send you a free PDF of this post. Once trades take place above that flat upper resistance level it is considered a breakout above that level. The flat top breakout pattern on top growth stocks can see big movements to the upside after being broken. A breakout is the movement of the price of an asset through an identified level of support or resistance. In this pattern, there’s no pullback and no downward slope during the consolidation period. breakout is one of the most popular trading methods. Again on a 5 minute chart (each candle on the chart represents the low price, high price, open and closing price of the next five minutes of trading). The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. The bear flag is an upside down version of the bull flat. Since I like to follow the Turtle Trading System trend-following rules this pattern suits my style perfectly. What is a Flat Top? Whenever price finally moves above the resistance and stays there whether intraday or with a gap up at the open this signals the flat top breakout. The flat top breakout pattern is similar to the bull flag pattern except the pullback typically has, as the name implies, a flat top where there is a strong level of resistance. The Flat Top Breakout Pattern. Here is a flat top breakout pattern on ROKU which occurred early this year. Unlike other business ventures, simulators now offer you the opportunity to test and develop your trading strategy and skills without risking a dime. This is an awesome bull flag setup. A flat base consolidation is a shallow price correction that should possess the following characteristics: As with the cup and handle type pattern, a flat base consolidation must form within an existing uptrend. The flat top breakout pattern on top growth stocks can see big movements to the upside after being broken. A flat top breakout is a bull flag that consolidates sideways instead of pulling back. A breakout to new all time highs in price can have a lot of momentum and begin a new trend. This is referred to as day trading versus swing trading where you hold the stock at least 1 day over night. The flagpole forms on an almost vertical panic price drop as bulls get blindsided from the sellers, then a bounce that has parallel upper and lower trendlines, which form the flag. Hence, we have developed a resistance line. Discover why Tens of Thousands of investors and traders have already discovered the Tradetobefree difference and purchased our alert service and video training programs. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. Weaker flag patterns – not so much. Once trades take place above that flat upper resistance level it is considered a breakout above that level. After a long consolidation, and preferably at least 3 tests of the top of the flat top consolidation, the price will sometimes break out by moving above the top of the flat top pattern. ROKU developed a strong uptrend before the flat top breakout which is a key characteristic we look for leading into the flat top chart pattern. This is an awesome bull flag setup. Its not a top growth stock like ROKU and the many others we featured to clients this year before big moves, but it was a nice base hit and easy 4% profit within an hour. The chart: When I … In this case, BBBY had the 200 day moving average a few percent above the breakout point. Flat warts are smooth, flat-topped, flesh- or brownish-yellow-colored bumps the size of a pinhead. The swing trading patterns offer much more upside potential and are much more exciting to us on top growth stocks, all else being equal, but more about that in a moment. Also known as ascending triangles. This pattern can have a long price range consolidation period and needs a minimum of three tests of the resistance area to be called a flat top pattern. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. You can play this setup like a bull flag. This usually happens over a period of a few candles and will be easy to recognize on a chart by the obvious flat top pattern. If you draw trend lines around it, it looks like a rectangle. Here will be a runup to a resistance point where the sellers will push the price back down a few different times. This pattern utilizes 2 or more continuation or consolidation patterns to complete itself. You see that kind of move a lot more often out of these extreme bull flag patterns over $10. 1) Parabolic Breakout and Symmetrical Triangle: These patterns are the intra-day spikes that I covet dearly. With this type of a breakout buyers and sellers have been working through supply in the trading range and as they run out of shares to trade under the resistance highs shares will make higher prices above that old level. Some day traders also use a flat top breakout on the intraday chart to trade the quick momentum that can happen after price reaches a high on the day. The first element of this price pattern is an upward slope followed by a flat top. This is a chart snapshot from the Thinkorswim trading platform. The larger the pattern, the bigger the move if conditions are right at the breakout point. A flat top breakout intraday near the entry point of a flat top pattern on a longer-term daily chart is ideal. The stock trades sideways as the flag forms. For day traders, this is often too wide of a stop to be profitable. Unfortunately, fund managers generally cannot buy stocks under $5 because of their poor historical performance. Some day traders also use a flat top breakout on the intraday chart to trade the quick momentum that can happen after price reaches a high on the day. Flat warts are smaller than other warts and, unlike other warts, smooth on top. We notified clients of ROKU along with TTD (in a different bullish pattern) in the alert service just ahead of the breakouts in late February. $BOOT Boot Barn stock with a quick flat top breakout above 62.96, from Stocks To Watch , see #finance #money #stocktrading #stockmarket #stocks Once trades take place above that flat upper resistance level it is considered a breakout above that level. Flat Top Breakout Trading. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. If you want to save yourself months or years of work in developing your own strategy, you can check out our favorites we have developed and tested extensively over the past few years. The second element of the ascending triangle is a slanting or a rising trendline moving upwards. Introduction-Top 10 Chart Patterns Every Trader Should Know. Breakouts are used by some traders to signal a buying or selling opportunity. Flag breakoutThe breakout from a flag often results flag breakout in a powerful move higher, measuring the length of the prior flag pole. They are responsible for many of the fastest and largest gains that I have ever achieved. After breaking out of the flat top early this year, ROKU soared over 300% higher within several months. A flat top breakout is a bull flag that consolidates sideways instead of pulling back. Breakout dealing is usually some sort of traction dealing that will need INSTANT entryways together with generating a profit. While this thing comes with a rather blocky, unappealing design, it nonetheless can be an impactful car with its mobility and speed. It has the same structure as the bull flag but inverted. If a stock can make an extreme price move and hold those levels in a narrow consolidation long enough, the chances are better that it will make a strong secondary move if it breaks out with a lot of volume. The price is in a long consolidation between about $11.60 and $12.35. In this case, BBBY broke out to the upside and surged over 3% higher very quickly which is typical out of this day trading pattern on good but not the best opportunities. The sideways consolidation tends to be more bullish than a bull flag … It … Flat Top Breakout Trading Posted By: Steve Burns on: August 23, 2020 The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. This site uses Akismet to reduce spam. It was … Read More, The information provided through the Website and our services is intended for educational and informational purposes only and not recommendations to buy or sell a specific security. Read More…, What is Implied Volatility Crush? The set-up: Gold, as represented by the SPDR Gold Shares (GLD), has had solid resistance for months now, just a straight line that you can easily see on the charts, and Monday it had a flat-top breakout, finally breaking through the ceiling after a long-term consolidation period. The way to … Profit targets can be set at round numbers, an overbought reading, or a trailing stop can be used to maximize profits. In order to qualify as a continuation pattern, an established trend must first exist. If you draw trend lines around it, it looks like a rectangle. When all holders have a profit at the highs there tends to be less selling pressure and price can begin to move higher. This could have been a great target when day trading. Its very similar to the flat base pattern but is normally discussed in the context of day trading. This shows that the market has tried multiple times to break the resistance top but it couldn’t. The first element of this price pattern is an upward slope followed by a flat top. In most cases, I will wait for the actual breakout with enough volume. Hence, we have developed a resistance line. Instead, the consolidation has a flat top. The profit target we use will vary depending on the overhead resistance levels. Sometimes, the pattern begins to form an ascending triangle where it makes higher lows and finds resistance at around the same price point. Price action stayed in a consolidation range from approximately $165 to $157 for about two months. Burlington N Santa Fe is trying to move out of a trading range. The grey background on the chart signifies pre-market and after hours trading activity. This was the range and the flat top resistance was in the $165 price zone that was tested many times and not broken keeping the resistance at the top flat. Study some of the charts below and join us in chat as I call out setups and take my trades. This increases the chance of a breakout. Once trades take place above that flat upper resistance level it is considered a breakout above that level. The flat top pattern is first a long and narrow trading range pattern like the $GLD chart above. Stay tuned. ... and descending triangles a flat lower trendline. Breakout dealing is usually some sort of traction dealing that will need INSTANT entryways together with generating a profit. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level. Good luck trading out there. The flat top breakout is a bullish chart pattern that both swing traders and day traders look for when scouring the market for good trading opportunities. The same applies for the breakdowns. Stocks over $20 tend to be less risky as well. The narrow pattern is nice because it provides support if the price briefly goes back into the prior range. The second element of the ascending triangle is a slanting or a rising trendline moving upwards. There are many ways to trade a breakout and a good one to trade during a bull market is the Flat Top Breakout. Because this pattern is working very well ahead of Q3 earnings season, we expect some big home run trades on top growth stocks in the weeks ahead. On the best opportunities and catalysts, I’ll often start a position ahead of the breakout. Nvidia's flat base completed with a breakout in September of 2016 and was a total of five weeks long. Steve Burns: In this case, BBBY jumped more than 15% after the news and began to form a flat top consolidation after hours and before the market opened the next day. Instead, the consolidation has a flat top. A Triple Top Breakout that forms as a base after a decline would be deemed a reversal pattern, while a Triple Top Breakout that forms as a consolidation after an advance would be viewed as a continuation pattern. The flat top breakout is more significant on longer time-frames. The highest point of the base, 63.50, plus 10 cents gave a proper buy point of 63.60. The stop we often use is slightly below the low in the flat top pattern. Once trades take place above that flat upper resistance level it is considered a breakout above that level. Then, after the period of consolidation, the upward trend continues. The pattern shows the path of least resistance for the future trend. In fact, I find the best day trading opportunities are those near a great entry point on a longer time-frame. Once trades take place above that flat upper resistance level it is considered a breakout above that level. The breakout is confirmed on a close below support for a rising wedge and above resistance for a falling wedge; The entry comes on a retest of the broken level and can sometimes occur immediately without a rounded retest; A typical stop loss strategy is to place the stop loss beyond the last swing high or low of the pattern We prefer the ones that are just rectangular shaped or that begin to make higher lows late in the consolidation near the flat top breakout. The candles look the same, and so does the pattern, but the upside is much greater in general. Flat top breakout trading is used by many momentum traders and trend followers to enter a long position on a market that has broken above … An Example of a Good Flat Top Breakout on Earnings and One We Avoid, Top Opportunities We are Eyeing for Our Own Accounts. 6 Breakout. Instead, the consolidation has a flat top. Flat top breakout trading is used by many momentum traders and trend followers to enter a long position on a market that has broken above resistance on a long-term chart. After the price reached the 200 day moving average it began to pull back and go below the entry point. Traders like to open a long position when a stock moves above a resistance level. As price finally closed above $165 the chart became a flat top breakout. These include Bull Flags, Bear Flags, Flat Tops, Flat Bottoms, and Ascending and Descending Wedges. The trigger of the price breakout can be news, an earnings announcement, or a business catalyst that finally pushes the buyers to overcome the sellers and make new highs over the old resistance. If not, don’t expect to do well early on as with other trading strategies you are starting to learn. Flat top breakout trading is used by many momentum traders and trend followers to enter a long position on a market that has broken above resistance on a long-term chart. A flat top breakout can look similar to a flat base pattern but the difference is the flat top happens at the highs of resistance while a flat base can happen inside a long-term trading range and not press new highs. The range in this pattern can be rectangular shaped or have irregular support levels and both formations are valid as long as the top of the pattern at resistance is flat. This pattern also met the requirements for our bull flag pattern or high tight flag. If you have done the extensive back-testing and research to know which ones have a high likelihood of success, its a very exciting strategy. Breakout trading is used by active investors to take a position within a trend's early stages. After a lifelong fascination with financial markets, Steve Burns started investing in 1993, and trading his own accounts in 1995. Because we have a fresh catalyst, its more likely that more buyers will come in over time after analyzing the new news. So instead of a 5 minute candlestick chart, a 1 year daily candlestick chart. Here is the breakout in the above example. Spotting A Flat Base Consolidation. Some traders trade with the intention of owning a stock for just a few minutes or hours. So as a flat top breakout consolidates within a few cents of the highs, a bull flag pattern experiences typically 2-3 red candles of pullback and can even pullback to the faster moving averages like the 8 or 10 EMA. Day traders just want a quick price movement in one direction for profits and a break out can be the beginning of a move in that direction for the remainder of the day. If we wait to buy the highs on the bull flag, we are chasing and a … Flat Top Breakouts Stock Charts. Generally, you want a longer consolidation except for the most extreme uptrends such as this high tight flag pattern. A Flat Top occurs when there is a clear resistance level (flat top) and a slope of higher lows, indicating the upward trend: As you can see in the chart above, the pattern looks like a triangle with the top of the triangle being the horizontal resistance and the bottom … Lets start by looking at a flat top pattern that just came up on our radar yesterday morning. This is an awesome bull flag setup. The pattern can run in one direction as there is no pressure from trailing stops being triggered by holders only profit targets signaling traders to exit. BBBY (Bed Bath & Beyond) came out the prior evening with news that they were hiring a new CEO that has a great track record in an area where they want to improve – merchandising. The first thing I want to do is show you a flat top pattern on a shorter time-frame so you know what it is and the typical entry/exit strategies. The stock trades sideways as the flag forms. The 8 Breakout Hair Color Trends of Winter 2021 ... flat top, on the other hand, kept the height. Address: Tradetobefree.com, LLCPO Box 4882Cary, NC 27519, https://tradetobefree.com/wp-content/uploads/2017/09/logo_00.png, https://tradetobefree.com/wp-content/uploads/2019/10/flattoproku.gif, Tradetobefree.com, LLC - Copyright All Rights Reserved © 2019, ROKU Stock Forecast & Predicting Earnings Surprises, Latest ITBF Upgrades and Trading Q3 Earnings, our favorites we have developed and tested extensively over the past few years, How to Swing Trade Earnings – The Earnings Flag (2020 Update), Swing Trading a Market Uptrend & Riding a TSLA Rocketship. What is happening is that the buyers are beginning to overwhelm the sellers in the prior trading range – the flat top pattern. In this pattern the old resistance can become the new support on pullbacks as people who missed the first breakout will buy that price again with a second chance. Flat Top Breakout Pattern. The flat top breakout chart pattern gets its name from the top of the chart being flat as sellers and buyers have met and agreed at the key resistance level.