8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

1/101

Mastering BreakoutsMastering Breakouts

and Breakdownsand Breakdowns

Dan GibbyDan Gibby

Lead Moderator, Pristine.com Advanced Stocks and DerivativesLead Moderator, Pristine.com Advanced Stocks and DerivativesTrading Room, and Senior Pristine Certified TrainerTrading Room, and Senior Pristine Certified Trainer

Copyright 2006, Pristine Capital Holdings, Inc.Copyright 2006, Pristine Capital Holdings, Inc.

Pristine.com PresentsPristine.com Presents

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

2/101

DisclaimerDisclaimer

It should not be assumed that the methods, techniques, or indicators presented in this book and seminar will be

profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in

this book and seminar are for educational purposes only. This is not a solicitation of any order to buy or sell.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.

UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUALTRADING. ALSO, SINCE THE TRADES IN THIS BOOK and SEMINAR HAVE NOT ACTUALLY BEEN

EXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT,

IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING

PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE

BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

The authors and publisher assume no responsibilities for actions taken by readers. The authors and publisher are not

providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any

suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. All

readers and seminar attendees assume all risk, including but not limited to the risk of trading losses.

Day Trading can result in large losses and may not be an activity suitable for everyone.

Copyright 1994-2006 by Pristine Capital Holdings, Inc. All rights reserved. Printed in the United States of America.

Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or

distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of

the publisher.

2

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

3/101

Table of ContentsTable of Contents

IntroductionIntroduction

The Pristine Method

Trading Style and Time Frames

Trading Plan

Basics and FoundationBasics and Foundation

Initial Pristine Breakout/Down

PBO/PBD from Wide Range Bars

PBO/PBD from Gaps

Retracement After Breakout/Down

Secondary Breakout/Down

Late Day Breakout/Down

Gaps Negated in Morning

Fluid moves vs. Congestion

Wide Range Bars (WRB)

Volume

Quality Consolidation

Pristine ESP

Concluding ThoughtsConcluding Thoughts

Breakout/down StrategiesBreakout/down Strategies

3

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

4/101

What This Seminar isNot About

4

The intricacies of The Pristine Method (TPM)

Tools, tactics, or setups taught in TPM Parts 1-2

Trading Plan and Managing Your Trading Business

Risk management, proper share size, psychological aspects

Futures, options, commodities, and derivatives

Classical, technical, macro, or fundamental analysis

Level II analysis or direct access trading

Other topics included at Pristine Trading University

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

5/101

Introduction toIntroduction toThe PristineThe Pristine

MethodMethod

5

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

6/101

Who is Pristine?Who is Pristine?

Established in 1994 by Oliver Velez and Greg Capra,

Pristine provides insight, intelligence and education for

the self-directed trader

Much more than stock tips and buy-sell-hold advice, The

Pristine Method guides both new and experienced

traders to a more intuitive understanding of the markets

The Pristine educational system helps you understand the

markets and prepare you to trade objectively

Offer worldwide educational seminars, DVDs, trading

software, real-time trading rooms, and trading newsletters6

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

7/101

ONSITE SEMINARS

REAL TIME TRADING ROOMS

DVD

The BOOK

ONLINESEMINARS

NEWSLETTERS

COACHING

Eliminating The Barriers To Entry!

Pristine Capital HoldingsPristine Capital Holdings

7

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

8/101

RANKED # 1RANKED # 1 in Trading Education

by: FEATURED by:

Pristine Public RecognitionPristine Public Recognition

8

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

9/101

Traits of a Successful TraderTraits of a Successful Trader

Trading is a Business treat it like one!

Choose a definedMethod

Choose a time frame in which to trade from

Choose which stocks and/or Futures you will trade

Money Management

Discipline and Patience to followyour Method 9

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

10/101

Pristine Successful Trader MatrixPristine Successful Trader Matrix

COMPELLING TECHNICAL PATTERNTPM 1-2

TRADING PLAN

MANAGE IN BETWEEN

ENTER AND SET PROTECTIVE STOP

Wealth/Income

Hardware/Software

Setups

Instruments

Listed/OTC

Reward-Risk

Share Size and #

Market Internals

Management Rules

Pivots For Exits

Winning/losing

Trade Review

Continuing Education

Demon elimination

Discipline/Patience

NO SETUP,

NO TRADE!!

StopTarget10

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

11/101

Trade Types

The Pristine Method teaches specific Compelling Patterns

These should be clearly highlighted in your Trading Plan

PBS/PSS

CBS/CSS

Guerrilla Trades

Breakouts and Breakdowns

W and M Formations

Pinch Play

Failed Patterns

Bearish Gap that Bullies11

PBS

+COG

CBS

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

12/101

Breakout andBreakout andBreakdownBreakdownFoundationFoundation

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

13/101

13

Introductory ConceptsIntroductory Concepts

Bases and consolidations

Types of breakouts and

breakdowns

Quality of setups

Fluid versus choppy moves

When to trade with or against

the intended move

Using Pristine ESP

Congestion

areas

Fluid move

leaves little

congestion

Concept Review

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

14/101

14

Price CongestionPrice Congestion

Prices move between areas of

support and resistance

Congestion areas have

overlapping bars, tails, and

gaps

Fluid moves have consecutive

bar moves with relatively equal

openings and closings

Prices retrace easier without

congestion to the left

Congestion

areas

Fluid move

leaves little

congestion

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

15/101

15

IntraIntra--Day Pattern Into CloseDay Pattern Into Close

Hourly EOD Base

Opening price here

has higher odds of

retracementOpening Gap above

Base has high odds

of moving up

15-Min.15-Min.

15

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

16/101

Volume AnalysisVolume Analysis

Volume = Money and represents commitment or lack thereof

Price tells us what a stock is doing; Volume tells ushow

> 500,000 average 30-day volume

Volume increases should occur in the

direction of the PBO/PBD; reduced

Volume on Retracement

Volume increase without price moving is a warning

Volume is secondary to price . Price is King! 16

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

17/101

Proper Base or Consolidation

Consolidation is aresting periodin an existing trend

Want controlled, tight consolidation, with few to no

overlapping bars or significant gaps and tails

Base of at least 8 - 10 bars

Provides the base of support for breakout, or base of

resistance if break down

Low risk, high-odds strategy using The Pristine Method

17

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

18/101

Quality ConsolidationQuality Consolidation

Tight arrangement of bars

with few tails, overlapping

bars, and gaps 18

20MA

20MA

20MA

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

19/101

Improper Basing/ConsolidationImproper Basing/Consolidation

Poor consolidation: tails,

overlapping bars, and gaps 19

20MA 20MA

8/6/2019 Dan Gibby - Mastering Breakouts and Breakdowns

20/101

Pristine ESPPristine ESP

Pristi