Here we will look at how to make Forex profits with a timeless strategy anyone can understand and use. Let’s take a look at the strategy in more detail.
The strategy we are going to look at is a long term Forex breakout strategy and the reason it works is based upon the following two facts.
1. Forex markets trend for long periods and these trends last for weeks or months, so locking into and trading these trends with leverage, can make huge profits but how do you get into them?
The answer is simple by using breakouts:
2. If you look at any currency bull trend, it will start its trend from breaks to new highs and it will continue its trend, by breaking through highs so if we trade these breakouts, we can make some great profits.
Sounds simple doesn’t it?
Well most traders don’t do it, despite it being an obvious way to trade and the reason is they want to buy low and sell high and never want to enter a breakout, because they have missed the first bit of the move so what do they do?
They think ok, I have missed the first bit of the move, I will sit and wait for a dip back to a lower price and then enter my trading signal. What happens?
The trend carries on and the trader simply never gets in on the trade. Always keep in mind the best breakouts DON’T pullback!
If you want to trade breakouts, keep in mind it doesn’t matter if you miss the first bit of profit, as the odds on good breakouts favour more profits to come!
So what are the best breakouts to trade?
The textbook definition of a breakout is:
A resistance level must have two tests but really it’s the more tests the better and the wider apart in time they are the better. You should look for six, seven or eight tests, because if this level breaks, traders consider it important and you will get a big move.
Breakout trading offers outstanding risk to reward, as your stop is close if your wrong i.e. just below resistance and on the big breakouts, the upside can be 10 or more times your risk, so it’s a great low risk, high reward way of trading.
If you focus on trading big trends and big breakouts, you can make triple digit gains in around 30 minutes a day. So if you want to enjoy trading success trade the big breakouts and make some great Forex profits.
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