Introduction
Matt Monaco here. What you’re about to read isn’t some overnight success story—it’s the real journey of how I mastered breakout trading after years of struggle. Like many traders, I started with massive losses and mental barriers. What changed everything was developing a systematic approach to identifying high-probability breakouts and managing my mental game. Today, I’m sharing the exact strategies that transformed my trading from consistent losses to reliable monthly profits.
Trader Talks QnA
You mentioned trading live was nerve-wracking at first—how did going public with your trades impact your mental game?
For a long time, I was superstitious about sharing my trades—like if I told Bryce I was in a position, it would instantly fail. When we started trading live, I was nervous. But it turned out to be amazing. People brought positive energy to our small cab rocket room, and the accountability factor became huge. When you’re accountable to everyone, you can’t ignore your struggles—you have to figure it out. That pressure actually helped me and Bryce get back on track during tough months.
You and Bryce had a tough September but crushed October—what mental strategies helped you rebound?
September was brutal—we were both red most of the month. That period really tested our mental game. What saved us was having those deep conversations about what we were doing wrong. Trading is lonely for most people, but having someone who genuinely understands your journey is crucial. Bryce and I would have long talks asking ‘How do we get back on track?’ The accountability to our audience also forced us to buckle down and make changes.
How important is having a trading partner for accountability and growth?
Crazy important—it’s why Bryce and I succeeded. Trading is incredibly lonely; most people are just behind their screens. Bryce and I were roommates in college when we got serious about trading, which allowed us to grow together. The Beyond the PDT podcast was a turning point because suddenly we had the courage to share our journey. Now there’s a healthy competitive element too—if Bryce has six-figure months back-to-back while I’m taking it slow, it lights a fire under me to improve.
You mentioned your trading checklist—can you explain what that looks like for breakout trading?
My checklist starts with the daily chart—is it actually setting up for a breakout? Not all breakouts are equal. I look for stocks that spiked 3-5 days ago with proper consolidation, ideally with legitimate news catalysts (like Walmart-Amazon partnerships, not random pop-and-drop news). If it held at least 50% of its spike during pullback, I’m interested. The intraday setup must match the daily chart—when they align, that’s my strike zone. For biotech, I’m extremely selective—it’s rare to find real breakouts because most fade after phase news.
You mentioned buying at 90 cents when others buy at $1—how do you identify those early entry points?
I’m buying before the actual breakout level because I understand breakout psychology. When people see ‘breakout at $1’ in basic tutorials, they pile in there—but I’m already long from 85-90 cents. Why? Because I’ve seen thousands of breakouts. I identify levels that actually matter—a level touched five times during the initial spike is far more significant than a parabolic spike level only touched for minutes. I call it ‘breakouts within breakouts within breakdowns’—finding the most important support/resistance levels inside the structure.
How do you handle sizing when taking multiple shots at a breakout?
I use a ranking scale: A+, B, C setups. For an A+ setup (like OCGN last week), I might take full size immediately. For riskier plays, I take 20% position first—I’ll say ‘I’ll add full size over the high.’ If it hits my risk at that small size, it’s just a couple hundred dollar loss rather than a devastating hit. Many of my big trades start this way—I’m already in 75% before the main breakout because I’ve built position during consolidation. When it actually breaks out, I add that final 25%.
Matt Monaco Trade Statistics
After five years of trading, I’ve refined my breakout approach to produce consistent results. My focus on proper setup identification and strict risk management has been the key to sustainable growth. Below are key metrics from my most successful trading periods.
- 5 years of dedicated trading experience
- 85% of best trades come from pre-breakout entries
- Maximum 11:00 AM cutoff for morning session entries
- Risk never exceeds 1% per initial position sizing
| Month | Profit/Loss | Win Rate |
|---|---|---|
| September 2023 | -12% | 42% |
| October 2023 | +38% | 67% |
| November 2023 | +29% | 63% |
Key Trading Insights from Matt Monaco
Through years of trial and error, I’ve discovered what truly separates profitable breakout traders from those stuck in drawdowns. These hard-earned insights form the foundation of my current success.
- Breakout quality matters more than frequency—focus only on A/B+ setups
- True breakouts need 3-5 days of proper consolidation after initial spike
- Legitimate news catalysts (not random pop-and-drop) create sustainable moves
- Position sizing should vary based on setup confidence—not all entries are equal
Matt Monaco Trading Strategy
My breakout trading approach has evolved significantly over five years. What started as basic ‘buy the $1 breakout’ has transformed into a sophisticated system that identifies high-probability moves before they happen. Here’s exactly how I approach the market.
Daily Breakout Screening Process
Every night, I create a watchlist of 50-100 stocks that made significant moves that day (5-10%+). The next morning, I scan for stocks that held at least 50% of their spike during pullback. I’m looking for proper consolidation—not just sideways action but tightening ranges indicating building pressure. For biotech, I’m extremely selective, waiting for legitimate phase trial results rather than speculative news. I use what Dom Maestro calls ‘intra-daily’ 15-minute charts to spot these setups within the daily structure.
Entry Execution Technique
I typically take 3-4 shots at a potential breakout. If it’s a strong A+ setup (like a stock consolidating after positive Walmart partnership news), I might enter 75% during consolidation and 25% on confirmation. For riskier plays, I start with 20%—enough to ‘feel’ the stock’s movement but small enough that a stopout won’t damage my account. My cutoff is 11:00 AM—if it hasn’t broken by then, I move on because midday trading is notoriously difficult. If a trade fails but maintains structure, I’ll wait for it to reset and treat it as a completely new opportunity.
Matt Monaco Tools
These resources have been instrumental in developing my breakout trading approach. I recommend them to anyone serious about mastering this strategy.
- Profitly for sharing and analyzing trades publicly
- Level 2 data for identifying big buyers/sellers during breakouts
- Cobra Trading as my broker for short selling opportunities
- Beyond the PDT podcast for mental game development
Common Trading Mistakes to Avoid
Looking back at my journey, certain mistakes kept me stuck in drawdown longer than necessary. These are the pitfalls I see new breakout traders fall into every day.
- Trading basic ‘buy at $1 breakout’ setups instead of pre-breakout levels
- Ignoring the daily chart context when trading intraday breakouts
- Overtrading low-quality setups just to be active
- Not developing a position sizing strategy that matches setup quality
Conclusion
Breakout trading changed my life—but not because of some magic indicator. It was the discipline to develop a systematic approach, the humility to learn from losses, and the courage to trade publicly that created real transformation. My journey proves you don’t need six-figure monthly gains to succeed; consistent execution of high-probability setups builds wealth over time. Follow me on Twitter @mono_trader for daily breakdowns of quality breakout setups—I’m committed to helping others avoid the same mistakes I made.