There are a handful of different forex breakout strategies that are being used by traders to trade the forex market - That’s for sure..
It is also a proven fact that trading ” Breakout ” is indeed profitable due to the Explosive & Massive Movements that follow..
On the other hand….in order for any trader to consistently win from such breakout set-up…
He/She also needs to know how to filter ” False Breakouts ” too which are very common in the forex market…
( Those big banks, institutes and big players just love to trick small retail traders like us…..indeed….LOL )
Nevertheless…..You can avoid being suck into those ” traps and false breakouts “…… if You know how to watch for more proven hints from the market…
Here in this post…
I will be sharing on a proven ” Breakout Strategy ” which I nailed more than 280+ pips trading the Gbp/Jpy…
You will be looking in depth into how I look for ” Strong Hints ” of the BREAKOUT set - up..
As well as my entire decision making process from Entry …..setting Stop Loss and When to exit the trade…
Let’s get started now …
For this Gbp/Jpy trade….
The market has been plunging down fiercely when I saw the trade set - up…
And the good ” hints ” from the market that reinforce my BEARISH bias are those WHITE LONG CANDLES…
If You don’t know this yet….
Let me share with You more about LONG CANDLE in the market..
With LONG CANDLE ….it simple shows that there are ” STRONG SELLING INTERESTS ” + ” BIG VOLUMES “….
When these 2 factors present ….it would lead to LONG Candles formation in the market…
Combining these LONG Candles with any Breakout - set up…
One can really grab some nice pips from the market ( in a rather short time perhaps ….)
For this trade…..what is the set-up that make me want to SHORT this pair then….?
For any trade that I want to enter….
I need a ” strong ” reason or two in order to enter a position….
It is definitely NOT based on wild guess or feelings…or unbiased tots….judging….bla bla…
Those would only make any traders failed…..or simply struggling to break-even each month….
No good….:X
Upon spotted a nice ” Descending Triangle ” + ” LONG Bearish Candle ” ….
I affirm my decision to enter and SHORT …..
With a Descending Triangle….it is technically a ” Bearish ” pattern…
For this case…it would be a ” Continuation ” from the previous downtrend…
BUT…..as usual…I would have to wait for a better price set - up in order to reduce my risk further…
As I am trading on the 1 hourly for this trade…
It is considered an Intra Day position…
So the stop loss that I would be using would be in the range of 75 - 100 for this super volatile pair - The GBP/JPY !
( With an average Daily True Range of at least 200 - 250 Pips price swing …)
This minimum is essential to allow the trade to ” breathe ” without getting stop out unnecessary.
If You have not traded this Gbp/Jpy before….try it on a DEMO account…
And You would know what I mean by ” Super Volatile Pair “….*smile *
But definitely good amount of daily pips to be grabbed….if You know how…!
Here’s How I choose My “ SELL Entry & Stop Loss ” :
Upon seeing that ” Bearish LONG Candle “ as shown above…
I do not enter straight away as it might also ” retrace ” quite a bit too…
Very risky I think and not an appropriate entry set - up…
For this strategy…..
I am using 2 ” Exponential Moving Averages ” to track the trend..
One is the 10 EMA ( green )…the other is 20 EMA (white )..
I personally would like the price to ” at least pull back to the 10 EMA ( GREEN ) first ” before entering to SELL….
If You are also familiar with the Fibonacci level…..this would be around the 50% level too…
Then just give some pips as allowance above that level so that the trade can breathe and not getting our stop loss hit unnecessary.
As You can see from the illustration above…
I ” SHORTED ” the the GBP/JPY at Price 144.955
( when the price started turning down from the 10 EMA )
Stop Loss placed 85 Pips away at Price 145.805
As for the Take Profit target….
I would not set a pre-determined target .
Due to the fact that this is a Long Candle breakout set up…..
I would be using the 2 EMAs to help me decide ” when ” to exit the market..
That explains why for this forex strategy….I have plotted these 2 EMAs.
As usual…once the price move in my flavor for about 85 pips….I will the shift my stop loss to breakeven..
And just ride this intraday breakout from then on….
When To Exit Then…?
UNTIL……the price closed above the 10 EMA ( green )
Very simple way to exit the market…
And it works well for such ” explosive breakout ” set - up I must say…
Having traded them for years now….* smile *
Let me show You how below :
This technique of exiting the market using just simple EMAs cross-over is indeed very common..
And I dare say as long as You know ” how and when ” to use them…
They would work incredibly well…
Just like in this trade…..it basically notify me that it is time to exit the trade as the price has already crossed the GREEN EMA ( 10 )…
” POSSIBLY a reversal might be coming next is another meaning”….
During a STRONG BREAKOUT ……the price would be threading nicely along the EMA 10 too…..( if You look above )…
That explains why for this strategy….I choose to include these 2 EMAs….
In Forex trading…..there are a lot of strategies….techniques or rather technical indicators You can use to help re-inforce Your trading decision..
It is just a matter of ” knowing ” WHEN to use which ones…..
…WHEN NOT to use which ones…..that really matter….
I have been trading the forex market for more than 4 years now…
And I have literally seen a lot of different set - ups that have occurred in the market…
Some are worth trading ….as it it more reliable..
Some are best avoided at all cost…..
To me personally……I simply love trading such ” Breakout ” set - up indeed…
Especially when it is proven with such LONG CANDLE ….
It only makes my bias much more stronger….
Moreover….it is very simple to trade such Breakout set - up….
And the movements are really MASSIVE & EXPLOSIVE ….most of the time…
Try spotting them as it happens…
And learn to include this ” Explosive Breakout ” strategy into Your trading arsenal….. ( if You have not….)
I can guarantee that You would also love trading them in no time…..as You get more and more confidence with it..
Ultimately…..
You would also be seeing Your account growing fatter and fatter ……as it grow rapidly with those valuable Pips You successfully nailed…!
The total pips gained for this GBP/JPY trade is a whopping 287 Pips…
With my initial stop loss at a tight 85 pips…
This gives me a very good risk/reward ratio of at least 1 : 3….* smile *
Definitely a good trade…..
Of course….the net profits of USD $3,199.13 also make me a happy ” breakout ” trader too…!
Here’s the earnings screen shot with the SELL Order, SL & TP to share :
From my earnings proof….You can also see that my ” entry timing ” is at 7am GMT…
Which is also the London Market open….( biggest financial market in the world )
What this also implies is that ” Breakout ” set - up that coincide with the market’s open timing..
It is usually ” more reliable “…..
As most big institutes and banks would be open for operation like any normal day…
After all….successful winnings after winnings trading the forex market is about getting ” as much hints ” from the market possible…
The more ” reliable hints ” You can extract from the market to support Your trading bias ( direction )….
The better it is….and of course….the MORE CONFIDENT You would feel about that trade too….* smile *
Never stop learning proven strategies that work…..
The more knowledge You have acquired about forex trading….the more confidence and competent You would be end of the day…
And do feel free to venture into other posts I have wrote in my forex blog…
….as I have many other ” simple yet powerful ” forex trading strategies that I would like to share with You too…
So much for this strategy & step by step explanations….
Hope You would be applying this Breakout strategy of mine to Your own trading soon…
And grab some nice Pips ( Profits ) for Yourself during such Explosive Breakout !!
It is also a proven fact that trading ” Breakout ” is indeed profitable due to the Explosive & Massive Movements that follow..
On the other hand….in order for any trader to consistently win from such breakout set-up…
He/She also needs to know how to filter ” False Breakouts ” too which are very common in the forex market…
( Those big banks, institutes and big players just love to trick small retail traders like us…..indeed….LOL )
Nevertheless…..You can avoid being suck into those ” traps and false breakouts “…… if You know how to watch for more proven hints from the market…
Here in this post…
I will be sharing on a proven ” Breakout Strategy ” which I nailed more than 280+ pips trading the Gbp/Jpy…
You will be looking in depth into how I look for ” Strong Hints ” of the BREAKOUT set - up..
As well as my entire decision making process from Entry …..setting Stop Loss and When to exit the trade…
Let’s get started now …
For this Gbp/Jpy trade….
The market has been plunging down fiercely when I saw the trade set - up…
And the good ” hints ” from the market that reinforce my BEARISH bias are those WHITE LONG CANDLES…
If You don’t know this yet….
Let me share with You more about LONG CANDLE in the market..
With LONG CANDLE ….it simple shows that there are ” STRONG SELLING INTERESTS ” + ” BIG VOLUMES “….
When these 2 factors present ….it would lead to LONG Candles formation in the market…
Combining these LONG Candles with any Breakout - set up…
One can really grab some nice pips from the market ( in a rather short time perhaps ….)
For this trade…..what is the set-up that make me want to SHORT this pair then….?
For any trade that I want to enter….
I need a ” strong ” reason or two in order to enter a position….
It is definitely NOT based on wild guess or feelings…or unbiased tots….judging….bla bla…
Those would only make any traders failed…..or simply struggling to break-even each month….
No good….:X
Upon spotted a nice ” Descending Triangle ” + ” LONG Bearish Candle ” ….
I affirm my decision to enter and SHORT …..
With a Descending Triangle….it is technically a ” Bearish ” pattern…
For this case…it would be a ” Continuation ” from the previous downtrend…
BUT…..as usual…I would have to wait for a better price set - up in order to reduce my risk further…
As I am trading on the 1 hourly for this trade…
It is considered an Intra Day position…
So the stop loss that I would be using would be in the range of 75 - 100 for this super volatile pair - The GBP/JPY !
( With an average Daily True Range of at least 200 - 250 Pips price swing …)
This minimum is essential to allow the trade to ” breathe ” without getting stop out unnecessary.
If You have not traded this Gbp/Jpy before….try it on a DEMO account…
And You would know what I mean by ” Super Volatile Pair “….*smile *
But definitely good amount of daily pips to be grabbed….if You know how…!
Here’s How I choose My “ SELL Entry & Stop Loss ” :
Upon seeing that ” Bearish LONG Candle “ as shown above…
I do not enter straight away as it might also ” retrace ” quite a bit too…
Very risky I think and not an appropriate entry set - up…
For this strategy…..
I am using 2 ” Exponential Moving Averages ” to track the trend..
One is the 10 EMA ( green )…the other is 20 EMA (white )..
I personally would like the price to ” at least pull back to the 10 EMA ( GREEN ) first ” before entering to SELL….
If You are also familiar with the Fibonacci level…..this would be around the 50% level too…
Then just give some pips as allowance above that level so that the trade can breathe and not getting our stop loss hit unnecessary.
As You can see from the illustration above…
I ” SHORTED ” the the GBP/JPY at Price 144.955
( when the price started turning down from the 10 EMA )
Stop Loss placed 85 Pips away at Price 145.805
As for the Take Profit target….
I would not set a pre-determined target .
Due to the fact that this is a Long Candle breakout set up…..
I would be using the 2 EMAs to help me decide ” when ” to exit the market..
That explains why for this forex strategy….I have plotted these 2 EMAs.
As usual…once the price move in my flavor for about 85 pips….I will the shift my stop loss to breakeven..
And just ride this intraday breakout from then on….
When To Exit Then…?
UNTIL……the price closed above the 10 EMA ( green )
Very simple way to exit the market…
And it works well for such ” explosive breakout ” set - up I must say…
Having traded them for years now….* smile *
Let me show You how below :
This technique of exiting the market using just simple EMAs cross-over is indeed very common..
And I dare say as long as You know ” how and when ” to use them…
They would work incredibly well…
Just like in this trade…..it basically notify me that it is time to exit the trade as the price has already crossed the GREEN EMA ( 10 )…
” POSSIBLY a reversal might be coming next is another meaning”….
During a STRONG BREAKOUT ……the price would be threading nicely along the EMA 10 too…..( if You look above )…
That explains why for this strategy….I choose to include these 2 EMAs….
In Forex trading…..there are a lot of strategies….techniques or rather technical indicators You can use to help re-inforce Your trading decision..
It is just a matter of ” knowing ” WHEN to use which ones…..
…WHEN NOT to use which ones…..that really matter….
I have been trading the forex market for more than 4 years now…
And I have literally seen a lot of different set - ups that have occurred in the market…
Some are worth trading ….as it it more reliable..
Some are best avoided at all cost…..
To me personally……I simply love trading such ” Breakout ” set - up indeed…
Especially when it is proven with such LONG CANDLE ….
It only makes my bias much more stronger….
Moreover….it is very simple to trade such Breakout set - up….
And the movements are really MASSIVE & EXPLOSIVE ….most of the time…
Try spotting them as it happens…
And learn to include this ” Explosive Breakout ” strategy into Your trading arsenal….. ( if You have not….)
I can guarantee that You would also love trading them in no time…..as You get more and more confidence with it..
Ultimately…..
You would also be seeing Your account growing fatter and fatter ……as it grow rapidly with those valuable Pips You successfully nailed…!
The total pips gained for this GBP/JPY trade is a whopping 287 Pips…
With my initial stop loss at a tight 85 pips…
This gives me a very good risk/reward ratio of at least 1 : 3….* smile *
Definitely a good trade…..
Of course….the net profits of USD $3,199.13 also make me a happy ” breakout ” trader too…!
Here’s the earnings screen shot with the SELL Order, SL & TP to share :
From my earnings proof….You can also see that my ” entry timing ” is at 7am GMT…
Which is also the London Market open….( biggest financial market in the world )
What this also implies is that ” Breakout ” set - up that coincide with the market’s open timing..
It is usually ” more reliable “…..
As most big institutes and banks would be open for operation like any normal day…
After all….successful winnings after winnings trading the forex market is about getting ” as much hints ” from the market possible…
The more ” reliable hints ” You can extract from the market to support Your trading bias ( direction )….
The better it is….and of course….the MORE CONFIDENT You would feel about that trade too….* smile *
Never stop learning proven strategies that work…..
The more knowledge You have acquired about forex trading….the more confidence and competent You would be end of the day…
And do feel free to venture into other posts I have wrote in my forex blog…
….as I have many other ” simple yet powerful ” forex trading strategies that I would like to share with You too…
So much for this strategy & step by step explanations….
Hope You would be applying this Breakout strategy of mine to Your own trading soon…
And grab some nice Pips ( Profits ) for Yourself during such Explosive Breakout !!
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