Do you think Breakout trading is good?
- Thread starter fx4ever
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I mostly trade breakouts from the consolidation areas.
Unfortunately, there is no reliable techniques of detecting false breakout, that is why I usually use a tight stop-loss level on breakouts to reduce losses in case of a false breakout.
Unfortunately, there is no reliable techniques of detecting false breakout, that is why I usually use a tight stop-loss level on breakouts to reduce losses in case of a false breakout.
No matter how complex, when you break 90+% of entry techniques down they all end up being in some form one of two options. The break out or the fade (reversal/pullback etc.).
I "do my best" to gauge if a instrument is statistically more likely to break out or pull back. Then implement either entry strategy based on that or look to trade something else. Take the Eu/Usd from Sept. until recently. It had in my opinion, much much higher chance of breaking short than just ranging and everyone felt the same for the most part, so statistically your chances of success should be higher. The mini dow during QE was damn near free money trading break outs. Now its better to fade the edges or stay away all together in my opinion. Is the instrument your looking to trade most likely to brake or fade? That's what I kinda ask myself. If I can get in line with that orderflow, take good entry's and not fumble up my trade management I should come out on top. So trading break outs are good and bad same for reversals.
I "do my best" to gauge if a instrument is statistically more likely to break out or pull back. Then implement either entry strategy based on that or look to trade something else. Take the Eu/Usd from Sept. until recently. It had in my opinion, much much higher chance of breaking short than just ranging and everyone felt the same for the most part, so statistically your chances of success should be higher. The mini dow during QE was damn near free money trading break outs. Now its better to fade the edges or stay away all together in my opinion. Is the instrument your looking to trade most likely to brake or fade? That's what I kinda ask myself. If I can get in line with that orderflow, take good entry's and not fumble up my trade management I should come out on top. So trading break outs are good and bad same for reversals.
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I think breakout is the best, and I stick to it. Breakout of the key levels will tell you if there is a direction or not. And trading with the trend is always safer.
In breakout strategy you can easily check the history. Mainly its traded with London session open, so you can check the history of any pair and then you can trade this strategy with ease. You need more screen time as you have to check for breakouts after every hour.
Yes I agree,this strategy coupled with an appropriate money management could yield good results,But one thing I bear in mind is that not all market conditions are conditioned for this strategy,hence I look out for volatile currency pair,break and then set a stop loss to limit losses.
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Trading breakout is a good strategy that many traders use for their entries. Price action traders have the advantage of trading with the trend on their side and then they could be the first to notice market reversals. In breakout trading, after looking for the previous swing high or low in an uptrend, trading a price action breakout becomes quite an easy process. When it comes to preparing for a market order, I will advise breakout traders to use entry orders because I have found entry orders to be pretty reliable as an effective and easy way to prepare for a market breakout. Basically in the forex market, an entry order is seen as a pending order. After you have located a breakout point to place an entry order, it is necessary for the trader to consider to how they would possibly manage the amount of risk. In normal trading conditions when trading a breakout in a fresh downtrend, you the forex trader should have in mind to place stops at a point above the broken line of previous support.
BO is one of the most popular entry point; of course, it brings more opportunities; but the thing is you need to read the market momentum so keenly if you wanna be a successful trader by the BO trading.
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