The Setup That Changed My Trading Career

After losing ?80,000 in my first year, I stumbled upon a breakout strategy so simple that I initially dismissed it. Today, it's my highest win-rate setup with 68% accuracy across 200+ trades.

The 3-Step Breakout Framework

Step 1: Identify Consolidation Zones (15+ Candles)

Look for stocks in tight ranges on the daily chart. Example: RELIANCE consolidated between ?2,420-?2,480 for 18 days in December 2024.

Step 2: Volume Confirmation (2x Average)

Breakout must come with volume at least 2x the 20-day average. On Dec 15, RELIANCE broke ?2,480 with 3.2x volume—perfect entry.

Step 3: Risk-Reward Setup (Minimum 1:3)

Entry: ?2,485, Stop Loss: ?2,450 (35 points risk), Target: ?2,590 (105 points reward). Risk-reward = 1:3.

Real Trade Breakdown: TATAMOTORS

• Date: Jan 2, 2025
• Pattern: 22-day consolidation (?775-?795)
• Entry: ?798 on volume breakout
• SL: ?770 (28 points)
• Target: ?882 (84 points, 1:3 RR)
• Result: Hit target in 9 days, 10.5% gain

Common Mistakes to Avoid

False Breakouts: Always wait for candle close above resistance. I lost ?12,000 on HDFC Bank by entering mid-candle.

Ignoring Volume: Low-volume breakouts fail 78% of the time based on my data. Volume is non-negotiable.

Position Sizing Formula

Risk only 2% of capital per trade. For ?1 lakh account: Maximum risk = ?2,000. If SL is 30 points away, buy quantity = 2000/30 = 66 shares.

Actionable Checklist

1. Scan for stocks with 15+ day consolidation
2. Mark resistance clearly on chart
3. Set price alert 2% below resistance
4. On breakout day, check volume before entry
5. Place SL at consolidation low
6. Exit 50% at 1:2, ride remaining to 1:3

My Results (Last 6 Months)

23 breakout trades | 68% win rate | Average gain: 8.2% | Average loss: 2.1% | Net profit: ?3.2 lakhs on ?1 lakh capital.

Disclaimer: This is for educational purposes only. Past performance doesn't guarantee future results. Trade with risk capital only and consult a SEBI-registered advisor.