Whether you want to learn the basics of stock and currency market, develop your trading skills and find working approach to identifying correct trading signals, whether you are already familiar with FOREX trading and want to deepen your knowledge of market and develop professional skills, or whether you are in a search of working trading system, this collection of articles will help you on your way to the big success.

Find out the underlying causes of stock market movements:

Day Trading — What It Is and What It's Not

The Three Phases of the Trading Day

Is it Possible to Earn Money With Day Trading?

Learn to identify the most important chart formations:

Identifying a Congestion

Identifying a Trend

Breakout Patterns

Find answers to the most debatable questions about FOREX trading:

Where and How to Place Stops

Basic buy signals – What to look for?

Learn to identify and trade using one of the most amazing patterns ever:

What Causes a Ross Hook?

Identifying Ross Hooks Patterns

Identifying a Ross Hook Validity Based on Trend Analysis

Breakouts are typically among the patterns least traded by day traders. The characteristics of a breakout are that the price action will stagnate within a fairly narrow price range until that range is broken out of. Once the price range has been breached, the move away from the area of congestion is often quite dramatic. Breakouts within the trading day usually occur toward the end of the day for securities that have not moved significantly during Phase 2 trading. There can be many reasons for this type of price action, the most common of which is referred to as a short squeeze, which we will now discuss.

It sometimes happens that traders see a security fall during Phase 1 trading. They believe this security is moving lower that day and take a short position but it does not fall any further. At some point in the trading day, most commonly near to market close, those short of the security will start to cover their positions by buying the security. Given that the security has not been falling, this buying starts to push the price up. This buying can also attract new buyers of the stock, which pushes the price up further and brings in the remaining short holders to buy the stock to cover their now losing positions. Although this is quite a neat description of market behavior, it is not a terribly common event. The way to catch these happenings is to set alerts on your market data system that will give off audio and, preferably, visual alerts should a security move out of an area of congestion.