How to recognize Price breakouts in Support and Resistance Levels


I’m a bit confused as to how to recognize price breakouts in support and resistance levels…Please help.


I think it’s going to help you to ask a more specific question.

The answer to the one you’ve asked above is simply that there has been a breakout when the price goes through a level of previous support or resistance, but I can’t see that statement (factual and accurate though it is) being very helpful to you, and can’t work out from your question what it is you [I]actually[/I] want to know. :28:

The price has to close above the resistance or below the support. I am speaking about the body of the candlestick here, not about its wick.
Here is an example on GBP/USD 1h chart.

However i don’t recommend trading breakouts.

Its well explained in the school

It is indeed!

How to Trade Breakouts in Forex

Here’s a bearish breakout pattern I just traded the other day. LINK.

Check out my analysis and charts, alongside the free educational material here as that should be a good starting place.

This is a breakout from support I noted last week. Here we had multiple touches of 111.00 over a 5 week period. Seeing a closed candle below support cleared the way for lower prices. In trading breakouts you must wait for the closed candle to confirm the breakout. You can trade these in any time frame you choice, but the longer time frames will give fewer false breakouts

So, did you trade it?


Watch the candlestick patterns and check out the higher time frames. That will usually give you the confirmation you need.

I was already short the dollar against AUD and CAD so I did not jump into it, with price pulling back another entry might present it’s self. A retest and rejection of the breakout point can make for a very strong entry signal, with that I am watching for a retest of 111.00 , that would be hard to pass on. Another area to watch is 110.00 , the 200 ma on the one hour chart is sitting just below this level. This would also be a full retracement of last Thursday’s big red candle. That gives us multiple levels of resistance at 110.00

USD is currently weakest of all the majors so it’s just a question of picking your spot and not letting the pullbacks chance you out of your positions

What’s your plan if you never get that pull back? What if a market is moving so fast and selling off so hard that a 300 pip retracement doesn’t happen?

Here is a breakout gone wrong…

Trade it at your peril…

If I don’t get the pull back to 111.00, I will be looking at the 200 ma on the 1hr chart, maybe we break above the ma on this pull back then I can short it as it breaks back below the 200 ma. It’s not the end of the world if I don’t get the setup I like as I am already doing well shorting USDCAD

Yen has a pattern of moving from strong to weak back to strong more so that most currencies, for that reason I like to wait for the weak cycle to conclude before buying Yen.

I post a daily Strong Weak ranking of the 8 majors here is the link

How about you don’t trade because it’s not in your trading plan?
There are lots of timeframes and pairs you can apply the same logicto.

Thanx a lot for all the help guys! Appreciate it!

Problem is, most folks who are new to trading (and even some veterans) think the best/only entries available are on “pullbacks”.

The best entries are the ones that you have as planned in your trading plan.
If your trading plan says that you only trade pullbacks then you should only trade that.

The amount of opportunities available is not important.

We know price does not go straight up and pullbacks are part of any trend, so buying pullbacks works every time until that final pullback becomes a change in trend, there is where your risk lies in this way of trading. You can also trade on momentum with the hope that price continues to move in your direction, sometimes after a big reversal candle, price will just keep going and if you wait for the pullback you might miss the trade, I have taken trades like this but pullbacks are more common and can give you a better reward to risk ratio. Whatever route you take just don’t force the trade, if the setup is not to your likings then let the trade go, there will always be more trades in the future

I will not wait for the pullbacks to happen and will like to see what is the Intra-day trading ranges so that i could get some pips in them…

Here is 1hr chart of USDCAD going back to Feb 1st, black line is 200 ma, using the ma as your short entry point, look at all the short entries you would of had, had you waited for the pullback. Pullbacks are part of any trend and are the best friend of the trend trader