The formation of market trends often begins with a key breakthrough point. This observation reveals the fundamental principles of trend trading. When the market accumulates enough momentum and breaks through significant resistance levels or support levels, investor sentiment often shifts, potentially triggering a strong market movement. Many traders choose to enter at the moment of the breakthrough, hoping to capture the beginning of the trend and achieve substantial profits.

However, in real trading, not all breakthroughs can evolve into sustained trends. The market is like a deceptive opponent, often creating false breakthroughs: some quickly fall back after just breaking through previous highs, trapping those who chase the highs; some hesitate after breaking through, getting stuck in a consolidation range, exhausting investors' patience; and some only rise slightly before returning to a sideways state, putting holders in a dilemma.

In the face of such a complex situation, how can we improve the success rate of breakout trading and convert signals into actual profits?

The primary task is to learn to distinguish the authenticity and strength of a breakout. A truly strong breakout is usually accompanied by a significantly increased trading volume—such as reaching 1.5 times or more than the usual level—while the price can quickly escape the breakout area, leaving little room for a pullback. If the price quickly falls back into the original range after breaking out, it is likely a false breakout. In this case, decisive stop-loss is necessary; do not harbor any hopes of luck. Always remember: protecting the safety of funds is the primary principle of trading, and timely stop-loss is much better than being deeply trapped in losses.

Secondly, once a trend is established, a dynamic take-profit strategy should be employed to protect the profits gained. Many traders catch the starting point of an upward trend but fail to take profits in a timely manner, leading to profit retracement. One can try using a trailing stop method: for example, after a breakout on the daily chart, when the price rises by 5%, adjust the stop-loss level to the most recent pullback low. This way, profits are protected while allowing gains to continue to grow.

Although breakout trading is full of challenges, by carefully observing the market, strictly adhering to trading discipline, and flexibly applying stop-loss and take-profit strategies, we can still capture real trends in a volatile market and achieve stable profits.