Breakout Strategy and Pullback strategy
Fifty Seventh Session of Forex Training
Welcome back to Forex professional training in financial markets.
In this session Breakout Strategy and Pullback strategy will be studied.
Breakout Strategy
Breakout strategy is appropriate on the ranged market in which a trend would appear after a considerable amount of time.
Trader must draw the channel on the ranged market to determine whether it is horizontal or gradient.
Support and resistance lines should be specified, too. Breakout regions can be on the ranged or trend markets.
Entry point
Trader must indicate the channel around the ranged market.
After channel is broken by the trend followed by a Pullback trend towards the channel, trader can place an order after a powerful reversal candle is formed on the edge of the channel.
[adv_thirdsec ]
Tradable symbols
This strategy can be exploited on all symbols, on ranged regions, such as EURUSD, GBPUSD, Gold, Silver and Oil.
The best symbols for this strategy are Oil and Gold.
Time Frames
Trader can select all timeframes, however, the best timespans for this strategy are H4 and Daily.
Buy and Sell Positions
On the left graph, after the price fluctuated in a gradient channel, it has broken the channel followed by a Pullback trend.
Eventually, a Reversal candlestick has formed near the edge of the channel, on the Pullback point, hence, price increased towards the top.
Trader could place a Buy order over the Bullish candle that had formed completely.
A Bullish Flag pattern had formed in the channel so a trader could determine TP amount by measuring height of the first wave, H.
TP price could be H pips over the entry price, while SL price is lower than the Low price of that given Bullish candlestick.
On the right graph, after the price oscillated in a gradient channel, it has broken the channel followed by a Pullback trend.
Finally, a Reversal Bearish candlestick has formed near the edge of the channel, on the Pullback point, so price decreased towards the bottom.
Trader could place a Sell order under the Low of the Bearish candle that had formed completely.
A Wedge or Double Top pattern had formed in the channel, so trader could determine TP amount by measuring height of the last wave, H.
TP price could be H pips under the entry price, while SL price is higher than the High price of that given Bearish candlestick.
Trend must never cross the channel to inside of it after a Pullback, while candle must touch the edge of the given channel.
[adv_thirdsec ]
The example in MT4 platform on an upward ranged trend, a Triangle pattern had formed before the breakout occurred.
Then trend returned until the edge of the Triangle pattern, afterwards an Engulfing candle has formed, so a trader could place a Buy order with an entry price over that candle.
TP would be 100 pips higher than the entry price, while SL could be under that candle. Another example with the same pattern.
A Piercing Line candle has formed on the Pullback point, so a trader could place a Buy order with the entry price over this candle.
TP price was 160 pips higher than the entry price and SL was 37 pips lower than the entry price.
In a Horizontal ranged market, a Head and Shoulder pattern has formed, so a trader could draw the neckline to determine a breakout point followed by a Pullback trend.
A Shooting Star candle has formed on the Pullback point, so a trader could place a Sell order with an entry price lower than the Low price of thegiven candle and TP price would be 605 pips lower than the entry price.
On a Weekly timeframe, a Triangle pattern had formed, then the trend returned towards the Pullback point after it had broken the channel.
On the Pullback point, Piercing Line candle has formed and the trend moved towards the top.
That concludes this session, until next time and another session take care.