dhanpreet Posted October 22, 2010 Share Posted October 22, 2010 Forex breakout is one of the more commonly used trading strategies that are used by currency trader. The main reason it is so widely used is because of the clarity and simplicity of execution. It is so simple that even new traders without much experience can trade profitably with it if they put in some effort to practice the strategy in their demo account. So what exactly is Forex Breakout? It is the sudden surge of price in a particular direction after a period of side way movement or consolidation. With the sudden price movement, you will then enter a trade in the direction to grab the profit by riding the trend. Posted Image But How to Identify Forex Breakout Opportunity First of all, you need to know the various candle patterns that will eventually constitute a breakout trading. 1) Triangle Posted Image 2) Flag Posted Image 3) Trend Channelling Posted Image These are the common patterns for a forex breakout to occur. Usually It takes some time for the patterns to emerge and you should be on your toes when you saw these patterns on your chart and wait patiently for an entry opportunity. Secondly, you need the help of an indicator called “Bollinger Bands”. The purpose of this indicator is to provide you with volatility check. It will be able to tell you whether the price is currently in consolidation or not. When the upper and lower bands are narrow, it is signaling to you that the price is currently in consolidation and you should be waiting for a breakout. Here are the steps I usually take to trade forex breakout 1) Setup the following indicators – Bollinger Bands (Default Setting), Stochastic (Slow) and MACD (Moving Average Convergence Divergence). 2) Draw the necessary trend lines to identify support and resistance level or even channel wall. 3) Always keep a lookout for the Bollinger Bands when it is narrow as it usually signals a consolidation in progress and then wait for the stochastic to either go oversold or overbought. Once the price produces a sudden surge in movement and also at the same time the bollinger bands starts to widen, you should then wait for the stochastic to either curve up if you are going LONG or curve down if you are going SHORT. Posted Image 4) Always wait patiently for a proper trend line break before you enter any trade. Failure to do so may lead to loss of money due to fake outs. Posted Image This is usually how I trade breakout in forex and the winning percentage is pretty high for this strategy. Take some time to practice this strategy on your demo or micro live account until you are able to achieve consistent success before you go into standard account trading. 1 Quote Link to comment Share on other sites More sharing options...
omarelalfy Posted October 26, 2010 Share Posted October 26, 2010 This is usually how I trade breakout in forex and the winning percentage is pretty high for this strategy. Take some time to practice this strategy on your demo or micro live account until you are able to achieve consistent success before you go into standard account trading. Quote Link to comment Share on other sites More sharing options...
chuna1985 Posted November 10, 2010 Share Posted November 10, 2010 I don't usually apply there strategies, but i guess i will try this one. I hope it will work as specified. Quote Link to comment Share on other sites More sharing options...
yogeshwartyagi Posted December 7, 2010 Share Posted December 7, 2010 This is really good strategy when a pattern is breaked that is really the best time to enter the trade to reap maximum profit. Quote Link to comment Share on other sites More sharing options...
ellliottt Posted December 23, 2010 Share Posted December 23, 2010 This is good information. Every trader needs to learn patience and wait for the correct time to enter the market. Timing is everything in Forex. Getting into the market at exactly the right time will give you profits. Learning some technical analysis helps in deciding what the right time is. Quote Link to comment Share on other sites More sharing options...
standart Posted December 28, 2010 Share Posted December 28, 2010 Another useful information. I know about breakout but I never know if there is various kind of breakout. flag, triangle or trend channel, its far away from my knowledge. you make good and useful information not only for me but for other trader also. Quote Link to comment Share on other sites More sharing options...
budado Posted March 11, 2012 Share Posted March 11, 2012 Forex breakout is one of the more commonly used trading strategies that are used by currency trader. I don't agree that is more commonly used. Lets face it. How many times those theirs a breakout? it does not happen every day and not even every week. Theirs always a point in support and resistance in which its moving and breakout only happens if theirs a strong market force that result to breakout. Quote Link to comment Share on other sites More sharing options...
frederictks Posted October 4, 2012 Share Posted October 4, 2012 Can you beat the system ?? NO, but you can still make great money. There is no humanly way that you can beat the system, but you can make a very comfortable and profitable living from forex. Forex has a language of its own and in order to have a glimpse of success, you have got to learn the language. The better you master and translate the language, the more successful you become. What is this strange language???? It is the language of the charts. It doesnt matter whether you interpret candlesticks or bars I have a strong preference for candles, you must learn to properly interpret this secret chart language of price action. Your charts are the only indicator that is telling you the real right now truth. The only disadvantage to the charts that you see is that you can not see what is going on behind the scenes; but many times if you are properly interpreting your charts, you will glean clues about the possible direction of the market. Even with the knowledge of this secret mysterious chart language of price action, you can still get tricked. It happens. Why ????? Because the house always has and will keep the advantage. You can only hope that your interpretation of the language of the charts will be profitable for you most of the times. If you are properly interpreting this language most of the time, you will do very, very well as long as you dont allow your losses to run forever. Even after some traders become fluent in this price action language, they allow their losses to run and cut their profits short. THIS IS BACKWARDS and WRONG. The profits are suppose to run and the losers are suppose to be cut short. As traders, we all know if we had cut that trade short when we saw the market turn against us, we would have come out with a small loss as opposed to the crippling monster we ended up with. Dont allow your losses to run free. It is up to you when you are comfortable cutting them, but dont allow them to take over. LEARN YOUR CHART LANGUAGE Quote Link to comment Share on other sites More sharing options...
budado Posted October 8, 2012 Share Posted October 8, 2012 I do like to know how this things works but one thing I'm sure its not simple as its looks. I have hard time visualizing what this thread is all about but if only we can have acurate result when we going to use it to pinpoint breakout I'm sure I will be happy. I know its hard to earn money in forex. The best way to be successful is always to trade the right way and with the help of good strategy. Quote Link to comment Share on other sites More sharing options...
ATSATS Posted October 21, 2012 Share Posted October 21, 2012 sir actually i can not understand your strategy. please sir confirm it with easy. i need it so much. please sir help me. i am always looking for an strategy and also try to make some strategy but that are not worked all time. i just want a good system which will help me so much. Quote Link to comment Share on other sites More sharing options...
standart Posted November 4, 2012 Share Posted November 4, 2012 maybe some need picture to fully understand the pattern of breakout. but actually we will found it easy if googling since these breakout pattern is basic pattern. by the way, the sample you may be found will not same exactly with the fact in live trading, its need attention to catch the pattern. Quote Link to comment Share on other sites More sharing options...
ATSATS Posted December 20, 2012 Share Posted December 20, 2012 sir i have now realize your strategy. i have also tested your strategy. it have 7 wining trade out of 10 but another losing 3 trade is so much unprofitable. for this reason 3 losing trade is bigger than 7 winning trade. i also modified your strategy but not get any good out put. but thanxx for sharing this strategy. we want more strategy from your. Quote Link to comment Share on other sites More sharing options...
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