If the stock was a pump and dump penny stock (under $5) within the past few months, we tend to avoid it as they have a lower win rate, carry more risk and are more likely to turn over without warning. So instead of a 5 minute candlestick chart, a 1 year daily candlestick chart. 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. 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. Enter your email address and we'll send you a free PDF of this post. Here is a flat top breakout pattern on ROKU which occurred early this year. The stock trades sideways as the flag forms. 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 … These include Bull Flags, Bear Flags, Flat Tops, Flat Bottoms, and Ascending and Descending Wedges. Once trades take place above that flat upper resistance level it is considered a breakout above that level. You see that kind of move a lot more often out of these extreme bull flag patterns over $10. This is an awesome bull flag setup. a bullish chart pattern that both swing traders and day traders look for when scouring the market for good trading opportunities. The flat top breakout is more significant on longer time-frames. Also known as ascending triangles. This pattern utilizes 2 or more continuation or consolidation patterns to complete itself. Hence, we have developed a resistance line. Once trades take place above that flat upper resistance level it is considered a breakout above that level. Instead, the consolidation has a flat top. As price finally closed above $165 the chart became a flat top breakout. 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). 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. 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 buy signal is on the breakout. ... and descending triangles a flat lower trendline. 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. 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. Its relatively flat top means makes it more accurate and reliable to hit balls directly into the goal. Some of the best setups like ROKU soar 20% to 50% within days or weeks after the breakout. Unfortunately, fund managers generally cannot buy stocks under $5 because of their poor historical performance. Instead, the consolidation has a flat top. You can play this setup like a bull flag. Lets start by looking at a flat top pattern that just came up on our radar yesterday morning. The ascending triangle or flat top breakout is a bullish formation that usually forms during an uptrend as a continuation pattern. 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 Profit targets can be set at round numbers, an overbought reading, or a trailing stop can be used to maximize profits. Also, on higher priced stocks especially, fund managers will be scaling into a new position or adding to an existing position. 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. 09:51:24 (From TradersWire) Daily Setup Alert. If you draw trend lines around it, it looks like a rectangle. The candles look the same, and so does the pattern, but the upside is much greater in general. 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 larger the pattern, the bigger the move if conditions are right at the breakout point. (See day trading vs swing trading to learn more.). Generally, you want a longer consolidation except for the most extreme uptrends such as this high tight flag pattern. The profit target we use will vary depending on the overhead resistance levels. 1) Parabolic Breakout and Symmetrical Triangle: These patterns are the intra-day spikes that I covet dearly. 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. 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. This pattern also met the requirements for our bull flag pattern or high tight flag. If you draw trend lines around it, it looks like a rectangle. 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. The stock trades sideways as the flag forms. The price is in a long consolidation between about $11.60 and $12.35. 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. Price looks like its pushing through a Flat Top Breakout on the 60 min. It has the same structure as the bull flag but inverted. What is happening is that the buyers are beginning to overwhelm the sellers in the prior trading range – the flat top pattern. Nvidia's flat base completed with a breakout in September of 2016 and was a total of five weeks long. The flat top breakout pattern on top growth stocks can see big movements to the upside after being broken. 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. 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. Price action stayed in a consolidation range from approximately $165 to $157 for about two months. 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. Good luck trading out there. There are many ways to trade a breakout and a good one to trade during a bull market is the Flat Top Breakout. Bull Flag: Bull flags are usually very small and can last for only one day or several weeks. Since I like to follow the Turtle Trading System trend-following rules this pattern suits my style perfectly. Once trades take place above that flat upper resistance level it is considered a breakout above that level. A flat top breakout is a bull flag that consolidates sideways instead of pulling back. 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. 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. If not, don’t expect to do well early on as with other trading strategies you are starting to learn. The stop we often use is slightly below the low in the flat top pattern. A Flat Top Breakout October 21, 2004 by Tsutae Kamada Probably buying on a breakout is one of the most popular trading methods. 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. Flat warts are smaller than other warts and, unlike other warts, smooth on top. The pattern shows the path of least resistance for the future trend. For day traders, this is often too wide of a stop to be profitable. (IV Crush), Best Exponential Moving Average Crossover Signals. The sideways consolidation tends to be more bullish than a bull flag … It … 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. 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. Unlike other business ventures, simulators now offer you the opportunity to test and develop your trading strategy and skills without risking a dime. This shows that the market has tried multiple times to break the resistance top but it couldn’t. So normally the entry point is slightly above the high in the flat top pattern. This shows that the market has tried multiple times to break the resistance top but it couldn’t. This site uses Akismet to reduce spam. In this case, BBBY had the 200 day moving average a few percent above the breakout point. The Flat Top Breakout Pattern. Discover why Tens of Thousands of investors and traders have already discovered the Tradetobefree difference and purchased our alert service and video training programs. When all holders have a profit at the highs there tends to be less selling pressure and price can begin to move higher. In this pattern, there’s no pullback and no downward slope during the consolidation period. In this pattern, there’s no pullback and no downward slope during the consolidation period. A breakout is the movement of the price of an asset through an identified level of support or resistance. Instead, the consolidation has a flat top. This is the flat top breakout. The chart: When I … This is a chart snapshot from the Thinkorswim trading platform. 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. Burlington N Santa Fe is trying to move out of a trading range. They are responsible for many of the fastest and largest gains that I have ever achieved. By clean breakout we mean that the price did not pull back below the entry point hardly at all after the breakout. 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. 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. The Flat Top Breakout Pattern. Once trades take place above that flat upper resistance level it is considered a breakout above that level. 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. 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 is a bullish chart pattern that both swing traders and day traders look for when scouring the market for good trading opportunities. 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 second element of the ascending triangle is a slanting or a rising trendline moving upwards. Study some of the charts below and join us in chat as I call out setups and take my trades. This was a shorter pattern in duration in that the narrow consolidation (flat top) only lasted a few days and occurred after the prior flat top breakout. The narrow pattern is nice because it provides support if the price briefly goes back into the prior range. Breakout dealing is usually some sort of traction dealing that will need INSTANT entryways together with generating a profit. The first element of this price pattern is an upward slope followed by a flat top. Typically, it will form after a breakout from a deeper correction (such as a cup and handle). Its very similar to the flat base pattern but is normally discussed in the context of day trading. Introduction-Top 10 Chart Patterns Every Trader Should Know. The bear flag is an upside down version of the bull flat. 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. It was also a very clean breakout which is a good sign for the remainder of Q3 earnings season. Stay tuned. Flat Top Breakout Pattern. I have about a dozen breakout stock scanners to help me find setups. 6 Breakout. The Flat Top Breakout Pattern. The sideways consolidation tends to be more bullish than a bull flag … Because we have a fresh catalyst, its more likely that more buyers will come in over time after analyzing the new news. This could have been a great target when day trading. 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. Some traders trade with the intention of owning a stock for just a few minutes or hours. While this thing comes with a rather blocky, unappealing design, it nonetheless can be an impactful car with its mobility and speed. This increases the chance of a breakout. Spotting A Flat Base Consolidation. Hence, we have developed a resistance line. The most bullish pattern we trade. breakout is one of the most popular trading methods. 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. In fact, I find the best day trading opportunities are those near a great entry point on a longer time-frame. 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. 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. The first element of this price pattern is an upward slope followed by a flat top. 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 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. A new CEO can be a big game changer for a company and stock price. We just caught a flat top breakout this morning on FAST. This is an awesome bull flag setup. Flat warts are smooth, flat-topped, flesh- or brownish-yellow-colored bumps the size of a pinhead. 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. The second element of the ascending triangle is a slanting or a rising trendline moving upwards. They are very slightly raised, and sometimes hardly noticeable. What is a Flat Top? 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. Once trades take place above that flat upper resistance level it is considered a breakout above that level. You can play this setup like a bull flag. Breakouts are used by some traders to signal a buying or selling opportunity. A flat top breakout is also a well known strategy used by many traders. Flat Top Breakout Trading. 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 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 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 8 Breakout Hair Color Trends of Winter 2021 ... flat top, on the other hand, kept the height. Flag breakoutThe breakout from a flag often results flag breakout in a powerful move higher, measuring the length of the prior flag pole. Once trades take place above that flat upper resistance level it is considered a breakout above that level. The Flat Top Breakout (AKA Ascending Triangle) The second best pattern for pennystocks is the flat top break out. Flat Top Breakouts Stock Charts. Flat Top Breakouts Stock Charts. After a lifelong fascination with financial markets, Steve Burns started investing in 1993, and trading his own accounts in 1995. 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 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. A breakout to new all time highs in price can have a lot of momentum and begin a new trend. 1. On the best opportunities and catalysts, I’ll often start a position ahead of the breakout. Here will be a runup to a resistance point where the sellers will push the price back down a few different times. Once trades take place above tha... Read more. 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 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. 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.