Posted by forex at 8:42 AM
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Forex Breakout Trading
1.
The price chart is your road map to the trend's direction.
Go to your computer and pull up a free charting service (see Resources section). List all the forex currency pairs in the left hand symbol column. This will link all the symbols to your chart so that as you scroll down the symbols list, it will pull up the price action on the chart that's to the right of the symbol column.At the bottom of the screen, press the '6 month' tab to reveal six months of price history on the chart
2.
Look for periods of price contraction within a forex currency pair.
Scroll down the list of forex currency pair symbols and look for periods of contraction within the price action on the corresponding chart. You can identify price contraction on the price chart by identifying both the upper and lower price points at which price is trading back and forth. Make note of any forex pairs that are in a contracting price range.
3.
Breakout trades are explosive because they have a lot of trading momentum.
Watch each currency pair for signs of forceful momentum that cause price to trade through any of the identified price points. You will then enter the move just as it emerges out of its trading range and ride the move upwards for a quick gain. Breakout trading is very explosive because it takes a lot of trading force, or energy, to cause it break out of the range, so momentum is very high.