Fade The Break

Fade the break is a forex strategy that follows the trail of the institutional traders,The purpose of this strategy is catch the failure breakout for trading reversal. Markets often reverse after a failure to break above the resistance level or below the support level.
Time Frame:15-minute (M15) or 30-minute (M30)
Currency pairs: majors.
Forex Indicators
No indicators are used for this strategy. We use support and resistance levels only.
Strategy description
Buy
Steps for a Buy signal
1. Identify the support level.
2. Identify a candle that has a shadow that goes below the support level.
3. Wait for that candle to close as a bull candle. This is called the false- break candle. (See Figure 1 .)
Fade The Break
4. Enter at the opening of the next candle.
5. Set a stop loss of 5 pips below the low price of the false break candle.
6. Set two profit targets for this trade. Set the two targets at a risk to reward ratio of 1:1 and 1:2 respectively.
Fade The Break

Fade The Break
In the last Figire example, the stop loss is 28 pips, the fi rst profit target is 28 pips from the entry price, and the second profit target is 56 pips from the entry price.
From the long example in Figure 3 :
Entry price = 1.3090
Stop loss = 1.3062
Profit target 1 = 1.3118
Proft target 2 = 1.3146
The risk for this trade is 28 pips, and the reward is 56 pips if both tar- gets are hit. The risk to reward ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.
Short Trade Setup
Steps for a Sell signal
1. Identify the resistance level.
2. Identify a candle that has a shadow that goes above the resistance level.
3. Wait for that candle to close as a bear candle. This is called the false-
break candle. (See Figure 4 .)
Fade The Break
4. Enter at the opening of the next candle.
5. Set a stop loss of 5 pips above the high price of the false-break candle.
6. Set two profi t targets for this trade. Set the two targets at a risk to reward ratio of 1:1 and 1:2 respectively. (See Figure 5 .)
Fade The Break
7. In this example, the stop loss is 22 pips, the fi rst profi t target is 22 pipsfrom the entry price, and the second profi t target is 44 pips from the entry price.
From the short example in Figure 6 :
Fade The Break
Entry price = 1.5843
Stop loss = 1.5865
Profit target 1 = 1.5821
Proft target 2 = 1.5799
The risk for this trade is 22 pips, and the reward is 44 pips if both tar- gets are hit. The risk to reward ratio is 1:2, which yields a tidy 6% return if we take a 3% risk.

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