Forex Breakout Trading - A Simple System You Can Use Right Now For Triple Digit Gains!
Forex breakout trading is a simple, easy to understand way of making money and in this article I will give you a simple trading system you can apply for profits right now - let's take a look at it. Every big bullish trend in a currency pair, starts and continues on it's path in the same way - the bullish currency breaks through resistance and moves higher and you can of course see this on any currency chart. While breakout trading is a simple way to make money, most traders try and predict in advance where a low might be rather than waiting for confirmation via a breakout. They go in the market and get stopped out and the old saying "a bottom picker becomes a cotton picker is true" because Forex markets cannot be predicted in advance. If you want to win, you trade the odds and breakout trading will get the odds on your side so let's look at our simple system.
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Trade Strong Levels of Resistance Only
You want a lot of tests and you want them as widely spaced apart as possible so use six tests or more and at least two of the tests should be at least 8 weeks apart. The bigger the number of tests and the wider the spacing the higher the odds.
Uncomfortable is Good!
If you are trading breakouts the best ones are ones when no one else agrees with you - why? The answer is neatly summed up in the Heisenberg principle in physics which quotes:
"if something is closely observed, the odds are it is going to be altered in the process"
If no one thinks a breakout will occur the chances are it will follow through because most people are not expecting it or looking for it and the general rule is - the less people expect the event the higher the odds and this true, if you think about the fact that 95% of traders lose money.
All the best traders, take trades that feel uncomfortable and if you do to, chances are you will make a lot of money.
Time Duration and Patience
The big trends last for many weeks, months or years and these are the ones you need to focus on - forget trading the market noise, be patient and wait for the big trends which make the really big profits and you will make less effort and make more money.
Money Management
If you are trading big trends, you should risk 50 - 100 pips on your stop and have a target of 500 or more. Never put your stop to close, most traders do this and lose. If you have a small account make sure you use lower leverage and a wider stop which will make you far more money than, high leverage and a close stop.
That's the system and no, I haven't used any indicators ( although you can add one or two if you wish) it will work well without them. It's a fact that simple trading strategies work best and this one is simplicity itself but if you apply it with discipline, you can make a triple digit income in just 30 minutes a day or less.
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