There are many ways to trade a breakout and a good one to trade during a bull market is the Flat Top Breakout.
What is a Flat Top?
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 is the upward sloping support trend line. That's why this pattern can also be referred to as the ascending triangle.
How to trade the Flat Top Breakout?
Entry Point:
Enter after the resistance level, the "flat top" has just been broken with increasing volume.
Stop Loss:
Place your stop loss just below the recent swing low.
Profit Target:
Use the height of the flat top/triangle to determine your profit target or objective.
In summary, the flat top breakout is a pattern that is fairly easy to identify and provide a good risk to reward trading opportunity.
Using the information covered in this post will help you with a trading plan that, when executed properly, can offer good profits, manageable risk and a higher probability of success.
If you found this post informative and helpful, please give a like and or share. Leave a comment if you have any questions.
And until next time, good luck with your trading!
What is a Flat Top?
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 is the upward sloping support trend line. That's why this pattern can also be referred to as the ascending triangle.
How to trade the Flat Top Breakout?
Entry Point:
Enter after the resistance level, the "flat top" has just been broken with increasing volume.
Stop Loss:
Place your stop loss just below the recent swing low.
Profit Target:
Use the height of the flat top/triangle to determine your profit target or objective.
In summary, the flat top breakout is a pattern that is fairly easy to identify and provide a good risk to reward trading opportunity.
Using the information covered in this post will help you with a trading plan that, when executed properly, can offer good profits, manageable risk and a higher probability of success.
If you found this post informative and helpful, please give a like and or share. Leave a comment if you have any questions.
And until next time, good luck with your trading!
