Sometimes it is rather difficult to have the patience to wait for a price pull back. Often, it is within the traders’ psychology not to chase the price upon breakout.
When a trader longs a position at a higher price, it is definitely further away from its support, below which the trader can define the stop-loss. There are 2 options that traders can set the stop-loss, either above or below the true support. The former will expose the trader to higher risk (as it was further away due to the breakout) while the latter will be more likely to be triggered, thereby resulting in losses.
The skill of finding the true / resistance (to take profit) becomes very crucial. An experience trader can actually ignore the indicators by just observing how the price behaves when it is near to the support / resistance. Many times, the indicators give mixed or conflicting signals when used together. True support is the strongest support nearest to the current price.
Having said that, most traders would be so psychologically affected and they would not have the right mindset to participate in subsequent breakouts when the prior attempts failed.
For swing trades that last for a few days to a few weeks, the focus should always be entering near support (for long) or resistance (for short). The detection of the strength of the imminent move should always be intraday. Otherwise, it is always safer to wait for pull backs to initiate trades.
Trading is just like mathematics. Only when the defined risks are small with the probability of winning high, can the overall profit be sustained.
Jayson's Financial Trading 