How to Identify High-Probability Breakouts That Actually Work

Welcome to the Beginners in Stock Trading Newsletter! Over the next several months, you’ll receive expert insights, proven strategies, and real-world examples from some of the greatest stock traders in history.

Every newsletter has 2 sections. The 1st section is devoted to learning. Each building on the previous day’s lesson in logical order. Giving you a full, free trading education in under ten minutes a day.

Missed a day? You can find all of the previous newsletters online to catch up or if you joined later.

The 2nd half of the newsletter is a briefing on 1-3 stocks in the news. Read it. Then click on the links to see the corresponding charts inside the original articles. This will accelerate your ability to read the charts.

Learning to how to trade will change your life.

✅ What makes a breakout truly high-probability—versus a fakeout trap.
✅ The three critical traits every successful breakout setup must include.
✅ How the best traders time their entries just as big money moves in.

There’s nothing more frustrating than buying a breakout… only to watch the stock collapse.

It happens to beginners all the time—but not to trained eyes.
The best traders in the world wait patiently for only the highest-probability breakouts. They know what a valid setup looks like and how to confirm it before committing capital.

📖 William O’Neil’s Insight:

Let’s walk through exactly what makes a breakout high-probability—and how to spot it before the crowd does.

✅ 1. A Proper Base Structure

✅ 2. Explosive Volume

📖 Mark Minervini’s Take:

✅ 3. A Strong General Market

📖 Example:

🚫 Buying a breakout in a bear market or during distribution
🚫 Chasing a stock after it’s already run 5–10% beyond the pivot point
🚫 Buying breakouts on low volume or without a proper base
🚫 Ignoring the general market trend

📖 Jesse Livermore’s Warning:

✅ Is the stock breaking out from a proper base (cup, flat, double bottom, etc.)?
✅ Is the pivot point clear and easy to spot on the chart?
✅ Did the breakout occur on volume 40–50%+ above average?
✅ Is the general market in an uptrend or showing a follow-through day?
✅ Is the stock in a leading industry group with a high RS Rating (>80)?
✅ Does the stock have strong earnings, sales, and margins?

✅ Log into your preferred charting platform:

✅ Screen for stocks that have:

👉 Journal 2–3 of these and note whether the volume and market conditions confirm a real breakout.

📌 Tuesday’s Lesson: The Trader’s Secret Weapon – How to Use Moving Averages
We’ll break down which moving averages matter, how top traders use them, and how to time your buys and sells with precision.

🚀 Stay disciplined & keep learning!

📌 Understanding stock price growth:
Look up the historical stock chart of Apple (AAPL) from 2004 to 2024. Notice how the stock’s price has risen steadily over time with some pullbacks.

Use these market tools to scan for and review stocks:

✅ MarketSmith (MarketSurge) – Premium Market Analysis and Scanner Tool
✅ Charts.com – Budget-Friendly Charting Option
✅ TradingView – Free & Subscription Stock and Crypto Charts
✅ DeepVue – MarketSurge Inspired Analysis and Scanner

👀 Seeing real-world stock patterns helps train your eye for long-term trends.

Our Sister Newsletter. Because everyone’s a Beginner in something.

The Fed just gave Wall Street something to smile about 😏

Federal Reserve Governor Christopher Waller made some very market-friendly comments on Monday — hinting that rate cuts could be coming down the pipeline. The Dow Jones jumped 318 points (0.8%), and the S&P 500 and Nasdaq followed right behind. Big winners? Apple, Goldman Sachs, and Walmart. 💰

But not everything sparked. Nvidia dipped a little. Tesla didn’t get the love other automakers did — even after Trump said he wants to "help" the auto industry. Investor mood? Mixed. Some optimism… but also a lot of side-eye on inflation and unemployment.

👉 Get the full breakdown here

One word: profit. And Goldman Sachs had plenty of it.

The bank’s stock jumped after blowing past Wall Street expectations with a 22% earnings surge. That’s not a typo. Meanwhile, Intel shares popped too — up nearly 3% — after announcing it’s selling most of its stake in Altera to Silver Lake. 📈

Put simply: the financial and chip sectors brought the heat today. If you're watching the big names for signs of strength, we just got one.

Tariff relief for tech? Yes. For now.

The U.S. just lowered tariffs on some Chinese tech imports — from 45% to 5%. That’s a pretty solid break for electronics makers, and it gave the tech sector a little boost. But don’t get too comfortable… the Commerce Secretary also warned that new tariffs might be on the way soon. 😬

Palantir soared nearly 5% after landing a NATO contract. But Amazon and UnitedHealth? Not quite feeling the momentum. It’s a mixed bag out there — and that’s exactly why we’re watching every move.

E-commerce Titan of Latin America

If you're looking for explosive growth potential in emerging markets, MercadoLibre (MELI) may be a name to keep on your radar. Often dubbed the "Amazon of Latin America," MELI dominates in both online retail and digital payments across countries like Argentina, Brazil, and Mexico.

MELI’s business model blends e-commerce + fintech, with its Mercado Pago platform gaining serious traction as Latin America shifts towards digital payments.

5 referrals How to Make Money in Stocks Complete Investing System by O’Neill

10 referrals How to Make Money in Stocks Success Stories by O’Neill

15 referrals How to Make Money in Stocks, Getting Started by Matthew Galgani

30 referrals Trade Like a Stock Market Wizard by Mark Minervini

50 referrals Lifetime access to the upcoming video courses and 50% off live events and digital products

Thank you for reading. We’re all Beginners in something!

-Beginners in Stock Trading Team