The Nifty gets a Breakout.

Trading ranges are meant to be broken, one side or the other. In a trending market, a range should , normally be broken in the direction of the trend.

The Nifty moved in a narrow range, roughly between 5100 and 5150, for well over six days. I say, over six days, since today morning it was doing the same thing.

By afternoon, the market decided it wanted to go up. The range was broken, and Nifty futures rallied from 5130 to 5215 before closing at 5210. Good enough!

Now, points of breakout are points of highest risk. (This one is my own, comes from trading thousands of breakouts!). If the trade is to fail, the trader will end up having bought / sold at the worst possible trade location. Each trader can have his own rules for trading breakouts. So far, he is consistent, each set of rules would lead to the goal – successful trading.