Champion Trader Buys NEW Breakout

An old Buffett adage goes something like this “we don’t have to be smarter than others, we have to be more disciplined” and what’s true for the investing world goes for the trading world too.

In that realm, champion traders have to watch stocks like a hawk. Waiting for the precise moment for breakouts to occur and then pouncing on them when they do.

One hot stock that arguably falls into the social media category has just been snapped up by a former champion trader, and the timing of the buy seems to be impeccable.

Key Points

• One champion trader has a highly disciplined entry and exit system that led to a 941.1% return and won him the US trading championships.
• That same trader has spotted a breakout in a stock that had been trending lower recently.
• He’s now so confident in the holding that he’s made it a core position in his portfolio.

How Champions Trade

The thing to know about champion traders is they don’t pick winners all the time, but they do have a highly disciplined approach. Some of them, like Oliver Kell, have a habit of watching, waiting, and patiently sitting on the sidelines until the precise moment a breakout occurs, and then pouncing.

If he’s right, he can ride a winner ever higher. If he’s wrong, he tends to be gun shy, and cuts losses in a hurry.

Others, who are less successful, tend to be more prone to buying news stories or narratives randomly and selling with a similarly unstructured approach. The adherence to a fixed entry and exit system is what led Oliver to a 10x return a few years ago.

And what he’s seeing now is a lesson in timing and discipline.

Anatomy of a Breakout

In the chart below, you can see a downtrending resistance line that Reddit stock hugged during its descent in July and early August. Then a plateau area was found and horizontal resistance stood firm until on Friday, August 23rd, when a breakout above that resistance took place, and Oliver pounced.

Interestingly, his conviction appears so high that he revealed it was a “core” holding.

Did add some RDDT today and actually have core position in it now…so much strength yest and strong again today…..raised stop to 56 though so handling tightly…..we will see if works or not….. pic.twitter.com/GEfZ8bcoZK

— Oliver Kell (@OliverKell_) August 23, 2024

Will Reddit Go Up?

Just because Oliver took a position in Reddit, and revealed so publicly doesn’t mean he isn’t willing to exit it just as quickly.

And that’s the key to great trading. If the stock does a U-turn and falls below the breakout region, it would be no surprise to see the core holding offloaded in a heartbeat.

For now, though, Reddit has the hallmarks of breaking out and turning into a nice winner. Will we see it rocket higher? Time will tell. For now, the breakout is confirmed and the trend looks bullish until the market says otherwise.