How to manage a breakup trade

How to manage a breakup trade 300 169 Minimalist Trading – Best Trading Indicators for TradingView

How to manage a breakup trade

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Introduction

Today we’re looking at another trading setup using our technical indicators, which are considered to be among the best indicators for TradingView. In particular, we’re using the Breakout Pivotal Bars in combination with the Levels and Zones, and the Sentiment Index.

We have a very nice trading opportunity so we apply our usual swing trade forex strategy by using the best forex indicator combination, including the Breakout Pivotal Bars and the Sentiment Index to build the trading setup, and the Levels and Zones to confirm our technical analysis.

Trade setup – 13 Sep 2018

How to manage a breakup trade Setup 1

On this GBPJPY TradingView chart, we identify an impulse followed by a consolidation that is taking place.

This price action, usually anticipates a second impulse to the upside, about of the same size as the first impulse.

In fact, the Sentiment Index is getting more and more compressed towards the zero line, which indicates that the market participants will soon need to decide where they want this pair to go, either up or down.

Trade update – 13 Sep 2018

How to manage a breakup trade Setup 2

The Sentiment Index just broke to the upside, so the market participants want this pair to move higher.

At the same time, the price broke up the consolidation that we’ve identified and the breakup candle is green, all conditions that confirm our buy setup.

Trade update – 14 Sep 2018

How to manage a breakup trade Setup 3

The price is moving rather quickly to the upside which gives us the opportunity to move the stop loss to breakeven so that, from now on, we’re in a risk-free trade.

Trade update – 17 Sep 2018

How to manage a breakup trade Setup 4

A new resistance has formed, this is suggested by the Levels and Zones. It is a warning sign, but we are in an uptrend, so with enough time the resistance might turn into a support and eventually help us reach the target.

Moreover, we’re well protected by the breakeven level so we just stay into the trade because we know from past experience that, once similar setups form, it is very likely that they eventually reach the target, no matter what happens in between.

Trade update – 18 Sep 2018

How to manage a breakup trade Setup 5

The price broke the resistance to the upside and so it became a support. Right now, it looks like it is retesting the support level and so we need to stay patient.

Trade closed – 18 Sep 2018

How to manage a breakup trade Setup 6

Ultimately, we got our 3.2x profit and, probably even more importantly, by closing another winning trade, we got yet another confirmation that these kinds of setups are very high probability setups.

During the trade a new resistance appeared between the entry price and our target, however, managed correctly, the resistance turned out to favor our fx strategy and allowed us to close another winning trade with a nice profit. Many times, when novice currency traders learn how to make money on foreign exchange, they end up developing very complex setups that end up compromising their trading account. What we like to do, instead, is to use an easy forex strategy that allows us to make a clear and simple chart analysis and to get consistent profits over time.