#BreakoutTradingStrategy Ideally, that consolidation comes after a price contraction where the price has gotten squeezed—think of a triangle pattern or price swings that converge toward each other. It can also be a flag or pennant pattern.

Low volume on the consolidation shows the stock has been forgotten about by retail traders. That is good. The institutions haven’t forgotten. They are buying up what they can. When the volume dries up, that is typically when they start buying at higher prices.

We then wait for a breakout of the consolidation and wait for a daily close before acting on the day trade. If