In this strategy (Real
Breakout Trading), we will avoid false breakouts and enter on the
real ones. We will use a stop loss in order to minimize losses and
maximize profits. You can use this strategy in any timeframe and in
any currency pair.
Rules Real Breakout
Trading:
We will draw 2 lines
in the chart, one at the high and one at the low of the period
between 7 PM and 11 PM, Eastern Time. After drawing these lines,
the currency pair you are looking at must do a breakout or a
breakdown from this channel. We are not going to enter here, in this
first breakout. We are going to wait until the moment the currency
pair reverses and makes the breakout or breakdown on the opposite
direction of the first breakout or breakdown. We will use a stop loss
of 20 pips. We will use the Awesome indicator to tell us when to exit
the trade.
Entry: Buy GBP/USD at
1.7576
Stop Loss: 1.7556
Exit: 1.7695
Profit: 119 pips
When you are considering
to use this strategy, the first thing you need to do is to draw the
two lines – the first one at the high of the day (between 7 PM and
11 PM, EST), and the second one at the low of the day (during the
same time span). In this example, the lines are at 1.7575 and 1.7523,
respectively, for the high and the low. In this particular trade,
there has been a false breakdown.
So, we are going to place
a buy order at 1.7576, 1 pip above the higher line, because we want
to enter on the opposite side of the first break of the channel. We
will also place a stop loss order 20 pips below our entry point, at
1.7556. After entering the trade, we need to monitor it very closely.
We will now start to look
at the Awesome indicator. As you can easily identify, while prices
are going up, the indicator is moving up as well. We need to focus on
the Awesome indicator because as soon as it starts to decline (turns
red) while it is above its centerline, it is time to exit the trade.
This happened at 1.7695,
which left us with a very nice 119 pips profit. This was a great
intraday trade.
Entry: Buy GBP/USD at
1.7367
Stop Loss: 1.7347
Exit: 1.7392
Profit: 25 pips
In this GBP/USD 15 minutes chart, we have drawn two lines which represent the high and the low for the period of time we are considering in this strategy. As you can see, there has been a false breakdown; so, we are going to look for a breakout of the channel. This happens at 1.7367. We will also place a stop loss order 20 pips below the entry point, at 1.7347. After entering the trade, we need to look at the Awesome indicator. As we entered in a long position, the indicator should be green and going up. When it turns red (and starts falling), it is time to exit the position. This was what happened at 1.7392. The total profit for this trade was $250 for each currency pair you’re holding.
In this GBP/USD 15 minutes chart, we have drawn two lines which represent the high and the low for the period of time we are considering in this strategy. As you can see, there has been a false breakdown; so, we are going to look for a breakout of the channel. This happens at 1.7367. We will also place a stop loss order 20 pips below the entry point, at 1.7347. After entering the trade, we need to look at the Awesome indicator. As we entered in a long position, the indicator should be green and going up. When it turns red (and starts falling), it is time to exit the position. This was what happened at 1.7392. The total profit for this trade was $250 for each currency pair you’re holding.
Entry: Buy GBP/USD at
1.7413
Stop Loss: 1.7393
Exit: 1.7472
Profit: 59 pips
As you can see in this chart, we had a false breakdown around 2 AM EST. We should insert a buy order at 1.7413 with a protective stop loss order at 1.7393, 20 pips below our entry point. After entering the trade, as you already know, you should pay attention to the Awesome indicator. As soon as it turns red and starts moving down, it is time to sell your position. This happens at 1.7472, giving us 59 pips profit.
As you can see in this chart, we had a false breakdown around 2 AM EST. We should insert a buy order at 1.7413 with a protective stop loss order at 1.7393, 20 pips below our entry point. After entering the trade, as you already know, you should pay attention to the Awesome indicator. As soon as it turns red and starts moving down, it is time to sell your position. This happens at 1.7472, giving us 59 pips profit.
Entry: Short GBP/USD at
1.7646
Stop Loss: 1.7666
Exit: 1.7619
Profit: 27 pips
As usual, the first thing we need to do is to draw the lines that represent the high and the low for the period of time we consider for this strategy (between 7 PM and 11 PM EST). Then, we need to wait for the currency pair to make its first breakout of the channel, which is the false one. We will, then, enter the short sell order at 1.7646, 1 pip below the lower line that we have previously drawn. We will also set a stop loss order 20 pips above our entry point, at 1.7666. When the Awesome indicator turns green or starts moving up, it is time to cover our short. This happened at 1.7619, giving us a 27 pips total profit.
As usual, the first thing we need to do is to draw the lines that represent the high and the low for the period of time we consider for this strategy (between 7 PM and 11 PM EST). Then, we need to wait for the currency pair to make its first breakout of the channel, which is the false one. We will, then, enter the short sell order at 1.7646, 1 pip below the lower line that we have previously drawn. We will also set a stop loss order 20 pips above our entry point, at 1.7666. When the Awesome indicator turns green or starts moving up, it is time to cover our short. This happened at 1.7619, giving us a 27 pips total profit.
Entry: Short GBP/USD at
1.7402
Stop Loss: 1.7422
Exit: 1.7356
Profit: 46 pips
In this GBP/USD 15 minutes chart, we will place an entry order on the opposite side of the first breakout. As you can see, we will place a short sell order at 1.7402, 1 pip below the lower line, as well as a stop loss order 20 pips above our entry price, at 1.7422. Once the Awesome indicator turns green or starts moving up, it is time to cover our short sell position. This happens at 1.7356, leaving us with a 46 pips profit.
In this GBP/USD 15 minutes chart, we will place an entry order on the opposite side of the first breakout. As you can see, we will place a short sell order at 1.7402, 1 pip below the lower line, as well as a stop loss order 20 pips above our entry price, at 1.7422. Once the Awesome indicator turns green or starts moving up, it is time to cover our short sell position. This happens at 1.7356, leaving us with a 46 pips profit.
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