How I Pick the Best Markets for Breakout Trading

You can have a great breakout strategy. You can follow every rule. You can execute it perfectly. And you can still struggle to make money.

Why? Because there’s one thing a lot of traders overlook before they even open a chart: is this market actually good for breakout trading?

NASDAQ, gold, Dow Jones, NVIDIA, forex: different markets behave very differently when it comes to breakouts. And even when a market is suitable for breakouts, there’s a second question that matters just as much: when should you trade it? Pre-market? Main session? After-market? Or does it actually work better as a swing trade?

That’s exactly what I break down in the video below. I show you how I analyze several very different markets to find out where and when breakout trading has the strongest potential, and which markets I’d personally focus on.

Watch the full video below, then read on for the complete breakdown.

Table of Contents

Why Market Selection Comes Before Strategy Selection

Selection of market is a very, very important thing. If you trade the wrong strategy on the wrong market, you will never make money. These two have to go perfectly together. That’s the core idea behind everything in this analysis: before you touch a breakout strategy, you need to know whether the market you’re looking at even wants to breakout in the first place. If you want the fundamentals first, I’ve laid out what breakout trading actually is and how it works in an earlier post.

Figuring out which markets suit mean reversion, which suit breakout trading, and which suit scalping is, honestly, quite a science. Most traders never do this work. They pick a market because it’s popular, or because it’s the one they already watch, and then they force a breakout strategy onto it whether it fits or not.

The Problem: Forcing the Wrong Strategy Onto the Wrong Market

A lot of forex traders in particular don’t fully understand the importance of this kind of analysis. They try to fit an inappropriate trading strategy onto their market, and then wonder why the results never show up. That alone is where a real edge comes from: not from a better indicator, but from knowing you have the right market, the right strategy, and the right moment, all lined up together.

So instead of guessing, I wanted a way to actually test this across markets systematically. That’s where BreakoutOS comes in.

How BreakoutOS Analyzes Any Market for Breakout Potential

BreakoutOS has a fully automated feature built specifically for this: a tool called Breakout Radar, which analyzes a market’s data with a proprietary algorithm, pre-tests it across many different breakout strategies and approaches, and then summarizes the viability and potential of that market for breakout trading. Instead of manually testing strategy after strategy on a hunch, you load the data and let the analysis tell you where the potential actually is. No coding required, which is the same philosophy behind algo trading for non-programmers.

The Markets I Tested in This Analysis

For this breakdown, I picked a mix of datasets across futures, forex, and stocks so you can see how differently they behave:

E-mini NASDAQ (NQ), 60-minute data (about 15 years of history)
Gold futures, 60-minute data
EUR/GBP forex pair, 60-minute data
NVIDIA stock, daily data
E-mini Dow Jones (YM)

You can load in as many markets and as much data as you want. This is just the sample I used to demonstrate the process. Once the data is loaded, Breakout Radar does the heavy lifting and returns a result card for each market.

Reading the Results: Sessions, Direction, and Duration

Each card represents one of the selected markets, and breaks its breakout potential down across trading sessions and swing trading. This is where the second layer of the analysis comes in: it’s not just “is this market good for breakouts,” it’s “when and how.”

Day Trading vs. Swing Trading

Some markets show their strongest breakout potential intraday, on a specific session. Others show it on daily data, as a swing trade held over multiple days. Both are valid outcomes of the analysis. The point is to let the data tell you which one fits the market you’re looking at, rather than assuming.

Pre-Market, Main Session, and After-Market

Within intraday breakout trading, the results are further split by session: pre-market, the main session, and after-market (meaning after the regular trading session closes). A market can score very differently across these three windows, so a strategy that looks weak overall might actually be strong once you isolate the right session.

What “Up to 45 Bars” Means for Your Breakout Duration

Alongside session and direction, the analysis also surfaces a duration index: how long a typical breakout on that market tends to run. In this analysis, that figure showed up as up to 45 bars. On hourly data, that translates to roughly 45 hours; on daily data, it translates to up to five days. That’s useful information to have in hand when you’re actually building out a breakout strategy around a market, since it gives you a starting point for how long to expect a move to play out.

Market-by-Market Breakdown

Here’s what the analysis showed for each of the five markets I tested. And to be clear, these are the results for this specific analysis, not universal rules that apply to every period or every dataset.

E-mini NASDAQ: After-Market and Swing on the Long Side

Breakout trading on E-mini NASDAQ came out strongest in the after-market session, or as a swing trade on the long side using daily data. If I wanted to trade breakouts on NASDAQ based on this analysis, the best approach would be to focus on after-market (after the regular session closes) or on swing trading with daily data. For a deeper look at trading this specific market, see how I day trade E-mini NASDAQ.

E-mini Dow Jones: Swing Trading, With a Notable Pre-Market Score

For E-mini Dow Jones, swing trading came out as the stronger fit. After-market wasn’t as strong here as it was for NASDAQ, but pre-market was worth a closer look: it scored 58 points, which is a solid result.

Combining Sessions Across Markets

Because of that pre-market score on Dow Jones, there’s a combination worth considering: trading breakouts on E-mini Dow Jones during pre-market, then on E-mini NASDAQ during after-market. Pairing the two together gives you a flow of signals across sessions rather than one narrow window. This is just one example combination from this analysis, not a guaranteed setup.

Gold Futures: Best Suited for Swing Trading

Gold came out mainly suited to swing trading in this analysis, rather than showing strong intraday breakout potential across any particular session.

NVIDIA: Long Swing Trading on Daily Data

Since NVIDIA was tested on daily data, the results only cover swing trading, and on that basis, NVIDIA showed up as a good candidate for long swing trades.

EUR/GBP: A Neutral Market That May Fit Other Strategies Better

EUR/GBP told a different story. It came out fairly neutral and didn’t trend profoundly. It was actually quite weak in trending. Based on this, it’s maybe better suited to mean reversion or some scalping approaches, and I personally wouldn’t trade breakouts on it. That’s a useful result on its own: knowing a market probably isn’t a fit for breakouts saves you from forcing a strategy where it doesn’t belong.

Why This Analysis Gives You an Edge

None of this tells you exactly how to build a breakout strategy step by step. I cover that process in Masterclass Part 1. What this analysis does is tell you where to even start: which markets are worth building a breakout strategy around, which session to target, and roughly how long a breakout on that market tends to run. Once you know the right market, the right session, and the right moment, you’re already ahead of most traders who skip this step entirely.

That’s what I wanted to show in this video: not just one strategy on one market, but the process for testing any market, any session, and any timeframe before you commit to trading breakouts on it. In the next video, I’ll go through more tricks and tips for improving your breakout trading, so subscribe if you don’t want to miss it.

Pick the Market Before You Pick the Breakout