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Forex Breakout: Why are they so profitable?


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22 replies to this topic

#1
Hunny Gee

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Forex Breakout: Why are they so profitable?

FOREX BREAKOUT


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Most people know what is a forex breakout strategy| forex breakout system | forex breakout trading |breakout trading forex | forex breakouts

What ever name they call it. It is the same.

Forex breakout to name it simply is that – we are seeing that price| the forex market is consolidating for a long time. And we are capturing the big move once it eventually breakout from its consolidation.

I know of alot of full time traders who only trade one pattern. It is the forex breakout strategy.

Why? The reward is great and the risk is low.

By taking just 5 forex breakout trades a month would equate to very good money.

However, if traded wrongly or picked wrongly. They would only get a spike up/down and then to make a loss as the pair didn’t break out.

Forex Breakout: Why are they so profitable?

In the chart above : Forex pair Usd Chf

We can see that the overall trend for the pair is a down trend.

And in the past few days, weeks (from start june to mid july) – It has been consolidating in a box for a long time.

When we see such setups, we know that price will eventually breakout from the consolidation into a big move up or down.

And in the scenario, it will most likely be down as the overall trend for the pair is down. ( pretty simple right )

Forex Breakout: Why are they so profitable?

How to play the the forex breakout trade:

Its simple, we will play a pending sell order (yellow dotted line) right below the low of the previous low.

And our stop loss ( pink dotted line ) will be placed above the entry, behind several bars so that we will have a goodresistance if price heads back up.

Since price is making a new low. There is no previous data on how low it will come to.

Therefore, we will take our first profit off the table when the bar eventually breakout and closes. (marked by take profit 1)

And we will be trailing it for our take profit 2.

So you can see from this quick scenario of how easy it is to play a breakout trade and the risk reward is great.

If you mastered this forex breakout strategy alone, you will be making good profits in forex trading already.

But this is just one of our forex trading strategies we teach.

Check out our online forex trading AFM winning Price ActionForex Course where i teach you the exact FULL Forex Trading System & Strategies that i personally use to be consistently profitable.

See you on the other side my friend,


Asia Forex Mentor


Ezekiel Chew
Asia #1 Forex Mentor
www.asiaforexmentor.com

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#2
ermaniso2011

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the breakout strategy is very profitable couse of its nature.it works like this ,a trend cant stay in some range forever have to break to one side it will be up or down and mostly will make a big move like stepping a higher lever or lower level.if you are with them when they are moving then you are lucky.it is one time hit :)
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#3
rexway

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Yes but we need to trade the breakout strategy with stop loos,because some time after the breakout occure there is likely to be a reversal so tight stop loos should be set.
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#4
Hunny Gee

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A complete professional forex trading system that even newbies can apply instantly.

Asia Forex Mentor forex course is now FREE!
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#5
Bagus

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Yes but we need to trade the breakout strategy with stop loos,because some time after the breakout occure there is likely to be a reversal so tight stop loos should be set.

with our strategy to trade the breakout in the trade it would be important also in this trade to learn how to trade better in this trade by using the abilities in terms of looking at the trend in the trade that will be able to succeed


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#6
standart

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implement this strategy require experience. we should measuring potential of fake breakout because not always the movement will continue to run after break the ranging pattern. in some cases, price back again in ranging pattern after previously, break the pattern.


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#7
Decub

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@standart, I think I have to agree with you because a breakout system seems to be one of the most difficult phenomena to understand for an average Forex newbie. To a great extent, it is better avoided than tried because it has the tendency to make you bag losses due to the varying movement unless market try trends.
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#8
waseemilyas

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Undoubtedly but we have to trade the breakout tactic with halt loos,given that a while following the breakout occure there is probably going to protected a reversal so restricted avert loos must be founded. 


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#9
myregister

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Breakout tactic indicated that the price will make another attempt to rise higher, sometimes this is work and also based on history mostly works well compared it does not work. It is profitable to some people because this is an event where the market reaching a new history of the price(higher or lower price) also it makes people more confidence and make the price fall or rise further.


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#10
sidejob

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It is a sign of market's psychology the market will be fall or rise higher usually after the breakout happening on the market. With the breakout market will become more and more profitable for trader, but remember not all breakout is profitable because there are sometimes when false breakout is happening and you will get false signal.


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#11
myregister

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I think in technical trading, people see breakout as the part of new trading thus it will trigger psychology of many traders to start make a buy or sell and will drive the price to rise farther or even fall down to the next level. As long as someone believe it the price will be break up or down and become more profitable.


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#12
sidejob

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It is a signal like i said before and when signal is happening poeple will look for it. People will start to buy or sell depend on the trend and its breakout. Thus, the price will drive towards people sentiment, if there are a lot of people who sell it will be bearish if a lot of people buy, then it will be bullish and this is why breakout is profitable because it affect people's sentiment.


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#13
myregister

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As the signal for more potential of a trading i think breakout is important, especially for someone who cover most of their trading by use a technical analysis by use indicator itself. According to me, forex breakout is one of the most versatile signal since if you doubt it you can combine it with other indicators such as RSI or Moving Average for more accurate result.


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#14
sidejob

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As the signal for more potential of a trading i think breakout is important, especially for someone who cover most of their trading by use a technical analysis by use indicator itself. According to me, forex breakout is one of the most versatile signal since if you doubt it you can combine it with other indicators such as RSI or Moving Average for more accurate result.

Not versatile but well-proven. Forex breakout is really awesome tool which people have and able to predict many trend accurately even in few cases you will find that is not always true. Why it is profitable? Because it is an accurate and accurately predict the behavior of player in the market, and not just predict it also able to influence it.


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#15
myregister

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Not versatile but well-proven. Forex breakout is really awesome tool which people have and able to predict many trend accurately even in few cases you will find that is not always true. Why it is profitable? Because it is an accurate and accurately predict the behavior of player in the market, and not just predict it also able to influence it.

Yes, but as i said before there are some things you should considerate before use this strategy. Not easy and requires more experience to use this technique. Well-proven strategy like this doesn't always work my friend, accurate for some times doesn't mean it will keep accurate no matter what.


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#16
sidejob

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Yes, but as i said before there are some things you should considerate before use this strategy. Not easy and requires more experience to use this technique. Well-proven strategy like this doesn't always work my friend, accurate for some times doesn't mean it will keep accurate no matter what.

But at least there is bigger chance for me to make profit if use that well proven strategy, not to mention many people tried this thing before and it works rather than so called experimental strategy which we may lose our money. In the end, breakout is really good and proven and many people love it so use that strategy won't be much issue.


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#17
myregister

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It works but why? There are must be some reasons behind that event. Forex breakout is in fact the part technical indicator analysis, this makes people think that the price which reached and broke one line which agreed by the whole traders would drive the price further, it is either to the top or to the bottom. It is just matter of psychology.


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#18
francmorio

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I only trade breakout and reversals


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#19
Sininfinity

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I only trade breakout and reversals

 

What is your winning rate? Please share if you don't mind.


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#20
sidejob

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It works but why? There are must be some reasons behind that event. Forex breakout is in fact the part technical indicator analysis, this makes people think that the price which reached and broke one line which agreed by the whole traders would drive the price further, it is either to the top or to the bottom. It is just matter of psychology.

So what do you mean here that is a psychological effect? Well forex breakout is actually the signal of the market is trying to do something, is that either to keep the trend to the higher or lower level or changing the trend to the other direction. Remember this is not 100% working strategy, i can say at most 70%.


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