How to trade a simple consolidation breakout

How to trade a simple consolidation breakout 300 169 Minimalist Trading – Best Trading Indicators for TradingView

How to trade a simple consolidation breakout

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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.

After making the usual chart analysis and understanding what the technical indicators are currently suggesting, we identify a simple trading opportunity to the upside. We then wait for the breakout to occur, and since we have all the necessary confirmation from our technical indicators, we execute one of our best swing trade forex strategy, made up with the Breakout Pivotal Bars and the Sentiment Index, with the extra confirmation given by a major support indicated by the Levels and Zones.

Trade setup – 12 Apr 2018

How to trade a simple consolidation breakout Setup 1

The price action and the compression in the bullish Sentiment Index are suggesting that we might get a buying opportunity, probably in the next few hours.

Trade update – 12 Apr 2018

How to trade a simple consolidation breakout Setup 2

Not only we have the perfect buying opportunity, but the price is now even above a major support indicated by the Levels and Zones.

This major support will help our trade by pushing the price higher and probably easily reach the target, which we set by projecting the previous impulse to the upside.

The stop loss, instead, is set below the last few candles that happen to be in the middle of the consolidation. This should be more than enough since the price is above the major support, which should prevent it from falling below.

Trade update – 16 Apr 2018

How to trade a simple consolidation breakout Setup 3

After a few days, we can say that the setup got a little bit compromised by the fact that the major support ended and a new slightly higher resistance appeared.

Unfortunately, the price was still too close to our entry level and so we could not move the stop loss to breakeven but, by not getting emotional, we kept the trade open and closely tracked what the price was doing.

It turned out that it retested our entry level twice, and then moved higher. Now it has even broken to the upside the resistance which has now turned into a support.

Trade closed – 17 Apr 2018

How to trade a simple consolidation breakout Setup 4

The new support helped the price reaching the target, and so the trade is now closed with a profit.

We closed the trade with a 2.5x return, which sits in the low-end of our traditional profits, but it’s very frequent to achieve with this fx strategy, to the point that we could call it the best forex strategy for consistent profits.