Anyone Use This Breakout Strategy

I am thinking about testing it anyone currently profitable from it getting in before the breakout?

‪How To Trade Breakouts‬‏ - YouTube

Many people get tricked by fakeouts. The video does touch upon a couple good points, but knowing when to get in is tougher than it appears - hindsight is always 20/20!. What happens if you go long at a tested support level (looking to get in early) only to find that it shortly reverses and breaks through that support level? I do agree it’s important to get confirmation via indicator(s) or other charts to arrive at a decision where you’re confident it’s a solid resistance/support. Thanks for sharing.

move your stop up to 50% sometimes fakies are about 20-40 pips then comes tumbling back down seen this so often. Use a tight 5 pip stop if things go wrong.

If you use a 5-pip stop when things go wrong, you might as well close the trade, even in the middle of a freight train, you’ll get a 5-pip pullback just back the 5-min chart is OB or OS.

Now, Sladha made a good point, so my next post I’ll show you how to trade a breakout on an actual trade I had last week.

This is a 4-hour chart of the USD/CAD. These opportunities abound everyday. I should add if you are restricting yourself to only tracking one pair per day, then you won’t find these opportunities everyday. A nice thing about this is that all conjecture is thrown to the wind, and the pips come quickly.

Notice how price action broke under the TL. I keep statistics on this kind of thing, so I know what I’m talking about. It is close to 90% of the time that when a TL is broken that was drawn properly (The previous 2 words are key.), the price action will gravitate back to the TL or at least the point it was broken. The dotted line was drawn on my chart to show where the candle broke the TL. The entry to go short was entered when price pulled back to that point, and then yo see how quickly the pips were banked. This kind of thing is not a big deal. It happens all the time.

The proper way to draw the TL is from the dip to the 1st swing low, or the peak to the 1st swing high. Once the TL is broken, there will be a strong move, which is what deceives so many. They want to pounce on that by chasing the trade.

Another point needs to be made about breakouts, and again Sladha made a good point about breakouts faking someone out. A strong move on the other side of the TL still does not guarantee the breakout. It is the close of the candle that determines future direction. Everything is uncertain until the candle closes. This is why so many people get faked out on breakaways.

I can give copious examples, but breakaways happen when a market becomes OB/OS, and so you get strong price action. After the strong price action happens, some of it has to be corrected. What I described is how it gets corrected. After the predicted correction happens, then you jump in and go for the ride.

That’s absolutely great advice I will take it on board and try to trade the pullbacks I am new and get so frustrated when everything is ready then the pullback doesn’t occur.

My methodology is rather diversified, but that strategy is a part of my repertoire. Many people that follow my blog are amazed how a pullback to those certain points can be predicted. Plain and simple, if it breaks the TL, it is correcting. There are more to TL’s than meets the eye, but that is basic, tradeable stuff.

Unreal, as a new trader, there are a couple of things that you should know that are important. It is important to have a methodology that, with confidence, you can say in advance where price is headed. After all, if you are going to making a trading decision you need to know in advance of price action, and be right right much more than you are wrong. This is why I told you about how to trade breakouts, and why I rightly pointed out the misnomer associated with them. Many people fail because they see the breakout want to jump on its back, then it regresses, and then the trader bails with a loss.

That is also why I made the post, in advance of the event to prove it works. Now I am posting to show the event is in progress.

From a trader’s point of view, you need to know how to trade this breakout, because that is why you started this thread. Notice the 2 chartreuse lines I drew on the chart. The top line is the point the candle broke the TL. The bottom line is the point of support where the TL is currently residing. It will be somewhere in that space the trip north will resume. That is where you want to prepare to go long.

Trade this setup on your demo, set your TP for .8257. Take off for a few days, come back, then prove to yourself it works without risking a dime of your money.

your analysis was spot on… you are really good at what you doing … although the trade missed TP by a few ticks the trade is up 183 pips… i wish to learn mo from you… not asking for much but will be following your comments and advice time to time… thanks again

Kalonjifire, I use the ichimoku a proprietary set of S&R’s, stochastics, along with the TL’s. They all work confluentially, a well as have their place in certain situations.
I don’t want to impugn upon Unreal’s thread for personal talk, but I’ll send you an IM.

I know I talked about this pair earlier. The breakout was obvious, but look what happened. That is one long wick. This is why I am not in favor of trading the breakout when it breaks. Wait for it to break, then correct, then get in.