Thank you for response. An attachment is a few of how I trade breakouts using predefined support and resistances.

Can you explain what you mean by leg 1, retracement, final swing end? Maybe an example please?

There are different kinds of breakouts

1. resistance breakout
1B double top
1C triple top
2. Channel

They are all "resistance" breakouts but I am breaking them apart for clarity.

I don't really think your example is a resistance breakout.

You need to be able to establish clear defining rules for a setup such that if a friend was sitting beside you reading the list of rules he would recognize the setup and know where to place the entry and the stop.

rleplae has a good point about stops.
So I marked FT (for failed trade stop).
Above I used the emergency stop in my examples
So if I'm watching the screen and I feel the trade has failed I'll kill it but that is more a discretionary thing and as you say for testing simplicity the hard stop (BTW soft stops have a danger in a flash crash or if your computer/internet goes down.

If you look at my example of a resistance breakout on your chart you will see
1. a good retracement giving a clear resistance
2. a way of determining a signal bar
3. how you set a FT stop for this.

Looking at your third example you will see that #3 would have got you out.

Here is an example first the big view
Chart 1 - break of support (breakdown)
Chart 2 - swings and legs



and then close-ups of the support and the breakdown.
(notice volume bars)

Thank you for explanination. Very detail and similar to how I trade.

A few questions. This is just general logical trade talk.

1. In your example of bar open and close below support, what about the high of that bar? Do you think a trader completely confirm the entire bar (including wick or high of bar) is below the support?

2.What if buying at the open of next bar creates a stop loss distance greater then the trader normal stop loss normally used. See picture for example. I believe it depends on the R:R for the trade. The target could be twice as big as loss. But this type of entry does guarantee the trader participates in all breakouts, win or lose.

Thanks

Good questions.

The above was to answer your question about leg1, retrace and final leg - I needed an entry price to compute these. You asked what to record.

So though I'm not sure I think MFE is while in the trade, which doesn't answer the question what money did I leave on the table if I had traded it perfectly?

So, now this is for me you understand, I want to know:

1. How could have I seen this setup?
2. What firm rules should I have to get in the trade?
2B. What firm rules should I have to stay out of the trade?
3. What price, or time, should I enter to balance between too early, too late, missing the trade completely?
4. Does this setup have the potential to give a very nice RR?
5. How often will my trade rules get me in this setup when I would want to be in and how often to they keep me out of a trade I want to be kept out of?
6. Does this setup have a measured target? That is does this setup, within itself, its context, its formation, have an estimate of the final swing (low or high)?

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On question3.
Entering the trade correctly is VERY IMPORTANT in my opinion. The reason is exactly as you have mentioned.
If you enter too late then your stop may be so far away that the potential loss on the trade is too big.
Now your trade's potential RR is badly slewed and you might be better to stay out.

So many times I have broken "my rules" and not wanting to miss the trade have entered at less than the optimum price, then seen it reverse on me and watch my Loss rising - sweating -- then it reverses, now going in my direction -- after an eternity I am back to BE and then faced with th decision to close or hold -- but after all the time sweating it is easier to close -- then no sooner than I close does the blanketly- blank zoom into what would have been a lovely winner.

However, if you enter at the very best price, you are never in the "heat". The trade just keeps getting more and more profitable and you relax and can clearly compute the best exit.

Sayings:
"It's better to be out of a trade wishing you were in than in a trade wishing you were out."
"Nobody's IQ goes up once in the trade."
"It all seems so clear in hindsight."

Unless you are enormous rich with an enormous line (or trading someone else s dough to whom you are not emotionally attached) the emotions vs "logic" are the traders dilemma.
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(I will use resistance as example):
1. Retracement: Enter trade at resistance if the low of first candle (first candle to open and close and low, above resistance) is above resistance price.
2. Retracement: If candle close above resistance, enter at open of next bar. I will catch all trades.
3. Buy Above: Enter buy stop market order 2 ticks above the high of candle that close above resistance. stop below breakout bar.
4. retracement: If candle close above resistance, wait for another candle to touch resistance (now support) and close above resistance, then enter on open of next candle.

I am not sure which one of these are better. Also, if R:R is not greater then 1, I don't enter the trade. I am cheap, so I personally like option 1. Alot of different scenarios to test. But if I don't test, I will never know.

So continuing, The MDT is the context of the short term.

Here I have attached a 45 min chart and on it drawn three channels:
up
sideways
and down.

So the newly emerging downtrend gives a good short opportunity on a MD basis.
The beginning of a new MDT give a great context for a shorter term day trade in line with and in conjunction with the downwards MDT.

The rectangle formation gives a solid foundation, a reliable formation, to establish a series of trades short term day trades to the short side.