Breakout setups are one of my favorite patterns to trade. However, even if you miss a market that has a breakout move session, the increased attention and market activity often creates a good trade setup in the following session as traders chase the previous day move.
Chart patterns that combine breakout setups and gaps can make for good trade opportunities. Tuesday morning I was talking to a client, call him Jim, who was short the November soybean futures. There was a gap from 1332-0 to 1331-4 in the daily chart that hadn’t yet been filled in. Jim thought they might fill in the gap on Tuesday while I thought they might wait at least a day.