Do you know how to Trade Breakouts for consistent profits?
Knowing a breakout trading strategy that is profitable over time is what all traders want.
In the trade that we discuss below, we clearly explain how to trade breakouts and how to trade with the trend in an effective and consistently profitable way.
The best part?
Learning this breakout strategy is very simple and, once you understand how to trade breakouts, you will immediately benefit from it.
As usual, we start from our TradingView chart by using one of the best breakout trading indicators: the Breakout Pivotal Bars.
Trade setup – 13 Sep 2018
On this GBPJPY chart on TradingView, 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
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
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
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
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
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 breakout trading strategy and allowed us to close another winning trade with a nice profit.
Many times, when beginners traders learn how to trade breakouts, they build very complex setups that end up with many losing trades.
What we like to do, instead, is to use an easy but profitable forex breakout strategy that allows us to make a clear and simple chart analysis and to get consistent profits over time.
Of course, we like trading breakouts!
Do you like breakout trading as well? And in such a case, what’s your experience with breakouts?
Come share it by leaving a comment on the YouTube video above!
