Forex Trading Strategy: The Breakout

‘Break out’ trades occur when momentum breaks indecision in a ranging/consolidating market to bring price to a new level....

The Break ‘Long’: -

• If in an uptrend, we buy or go ‘long’ until we reach our target price.

• Look for tightly ranging bars where we can clearly define support and resistance.

• Buy the breakout in price action, placing an entry a few pips above the resistance level and a stop a few pips below the support level.

The Break ‘Short’: -

• If in a downtrend, we sell or go ‘short’ until we reach our target price.

• Look for tightly ranging bars where we can clearly define support and resistance.

• Sell the breakout in price action, placing an entry a few pips below the support level and a stop a few pips above the resistance level.