A break or not a break, that is the question.

[Pi3141]

When a breakout occurs, does a pullback occur more often than not? Or is the likelihood of a pullback dependent upon which markets you trade? e.g pullbacks after a breakouts occur more often in FX and S&P (for example)?

 

[Splitlink]

I haven't done the statistics on this. In, fact, I remember asking Jon a similar question many moons ago. You have to wait for the break in either direction because, as you suggest, it might go the other way with the old trend. The way I often go is with a close stop and see what happens.