Market signaled its intent yesterday with several stocks breaking out from nice bases. consolidations/pullbacks. The Fed decision will be focus of the market and the market might be volatile. But below the surface lot of small caps are showing nice action.
and more breakouts
Should you buy breakouts or pullbacks?
This is more than 100 year old debate. Some traders can trade breakout , some can only trade pullbacks.
There is no right or wrong strategy.
Biggest moves in stocks start with breakout and most fast moves do not offer you pullback buy opportunities.
Most good breakouts trader will have around 50% success rate. Most pullback traders will also have similar success rate. The key really is to make more money on trades that work and lose little on those that do not work.
For over 100 years people have researched these things and commonly used breakout and pullback setups are in public domain...
So based on your inclination you can design your own entry, exit, risk strategy.
Every choice you make involves some sacrifice....
As long as you understand that it is all about momentum. If underlying stock has momentum on your chosen trading time frame then both breakouts and pullbacks will work.
I buy breakout on momentum stocks and make my money year after year. Some do the same with pullbacks. The key is to have well defined method, perfect it and then execute it day after day to best of your abilities. If you do a good job of managing everything under your control, then you don't need to worry too much about markets. Profits are outcome of executing a well defined method with an edge.