High probability breakout strategy for currency trading

High probability breakout strategy for currency trading

Posted: blowoffexchanger Date: 05.07.2017

The Forex market is constantly offering lower and higher quality trade setups.

It is our job as traders to scan, recognize, select, enter and exit the ones with the best odds and reward to risk. The best way is via a strategy. A Forex strategy helps identify setups with a long-term edge because it allows traders to analyze the charts with a fixed process and rules. Traders can tackle the market either via a discretionary or non-discretionary system.

The discretionary method provides the advantage that traders can make a final judgment whether any one particular setup has a decent probability of succeeding. In that way traders can choose higher quality setups and ignore lower quality setups within their strategy. This article explains a simple tactic that helps Forex traders recognize the higher probability setups. New information is available on all currency pairs and all time frames every minute.

The market is basically in a constant change and each moment offers the potential for a new setup. Many of these moments however do not provide an edge to the trader. These setups do NOT offer a distinct advantage and have a low probability of success. Setups with a high probability of success have a certain scarcity. The Forex trader must wait patiently for these setups to occur, like a tiger waiting for their prey, and then execute with discipline when the moment arrives.

Decision spots are important and key levels on the time frame of your choice. This is critical because setups in the middle tend to be of lower probability and setups at key levels are of higher quality. Waiting for higher probability setups has enormous advantages for the trading psychology. First of all, it does not cost a trader any money.

Most importantly, traders do not have to worry about missing a setup, chasing a setup, entering a setup too soon, etc.

It is an enormous help for remaining patient and keeping the discipline needed to succeed in trading. Plus traders can avoid revenge trading by keeping a cool mindset. Taking too many doubtful trades can easily lead to over trading which leads to a slippery slope where a trader wants to earn back their money quickly. The trigger is the signal of interest a trader is waiting for.

The trader has been patiently waiting for price to move to one of their decision spots. And now price has reached it… now what? How and when to trade?

This is what the trigger solves. It basically is a call for taking action.

The trigger provides confirmation on how to trade at the decision level. It provides clues whether a trader will go long or short, or in other words whether they will take the break or bounce.

Each Forex trader can choose their own indicators, tools, patterns, trends, and support and resistance for the roles of decision spot and trigger. There is no right or wrong method and you should pick something which you like to use and that matches your trading plan and psychology. With that said, I will now present to you my own preferences for various decision spots and triggers and it is up to you if you use the same.

For decision spots my number one tool is the strike trigger candle and trend lines. Runners up are support and resistance , patterns, and moving averages. For triggers my number one tool is the candle stick and candle stick patterns. Runners up are fractals, and trend lines. Here is an example: After a while, price moves back to the support trend line.

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The trend line is the decision spot. Price can then show 2 different reactions via candle sticks. Hence the candle stick pattern is the trigger:. Traders can use different tools and indicators for each of the two roles. The above is just an example but one I use often for my own trading. Other sweet spots can be identified by using the concepts of impulse and correction. Price is always in either of the two and it depends on the strategy for which one is better for you.

For my own trading I prefer catching the completion of a correction, the middle of an impulse and also the start of the impulse. I try to avoid trading the end of the impulse, start of the correction, and the middle of the correction.

I use the concepts of decision spots, triggers, confluence, and wide open space to judge the best and highest probability setups. Learn Our Best Trend Trading Strategy. In binary trading there are high level of risk which you must be willing to accept in order to be able to invest and trade to make winnings,today I thank God that I am an expert in binary trading who has taught others the strategies on binary and forex trade in order to win trade and am still willing to teach with prooves whosoever is interested to know how I made it big in binary and forex trading.

Trading forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.

Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

4 Methods for How to Scan the Forex Market for High Probability Trade Setups | Winners Edge Trading

Home Blog Tools Pricing BROKER About Us Were Hiring Contact Us! DECISION SPOTS AND TRIGGERS New information is available on all currency pairs and all time frames every minute. But how does a trader recognize the moments of waiting and executing? This is when introducing the concepts of decision spots and triggers are crucial! WAITING FOR THE LINES IN THE SAND Decision spots are important and key levels on the time frame of your choice.

WAITING FOR THE ACTION OF THE TRIGGER The trigger is the signal of interest a trader is waiting for. DECISION SPOT VS TRIGGER Each Forex trader can choose their own indicators, tools, patterns, trends, and support and resistance for the roles of decision spot and trigger. Hence the candle stick pattern is the trigger: Confluence zones are actually the best decision spots available because it increases the probability of a trade setup succeeding.

high probability breakout strategy for currency trading

This happens because more support or resistance is available in that decision area, which makes the decision spot more valuable compared to decision spots with no confluence see example of confluence in screenshot above.

Wide open space is the potential movement price can make after reaching the confluence zone upon a break or bounce before hitting another decision spot. The more space the better as it allows the trader to have more options regarding exits. Do YOU use decision spots for your trading? How do YOU setup triggers?

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