London breakout forex trading

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Breakout trading is one of the most popular ways in which you can successfully trade on the Forex markets. Find out more now in this guide.

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  • My 2 cents would be, don't take the 100 pips. Target 10 pips and trail stop loss at breakeven. At worst, you will have 10 pips a day, almost every day. MM-wise, trade max lots (i.e. 100% of your capital), so you compound. Do this for London and NY breakout, and you'll have around 20 pips (15 minimum) a day. Compound 15 a day, and you'll be a millionaire in no time. Everyone in the business knows that 4000+ pips a year mean nothing without MM. I would rather consistently have 15 pips a day to compound, than 100 pips one day, -50 another, and so on (even if it leads to profits). So my advice is, use this strat, but don't get greedy. Take your 10-15, trail stop, and gtfo.
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  • @Mohamed Mahmoud No Skills required Risk free Trades with this strategy. This is 100% accurate and work. http://instaforexreal.blogspot.com/2015/05/forex-trading-100-no-loss-strategy.html Skype ID: Geynstuff Email : instaforexreal@gmail.com
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  • No Skills required Risk free Trades with this strategy. This is 100% accurate and work. http://instaforexreal.blogspot.com/2015/05/forex-trading-100-no-loss-strategy.html Skype ID: Geynstuff Email : instaforexreal@gmail.com
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  • The best pairs I have found worked with this strategy is the major pairs. EURUSD, GBPUSD, USDCHF, USDJPY
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  • its great strategy but
    what the best pairs that we can apply this system on it
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London breakout forex trading

  1. 1. How To UseBreakout StrategiesTo Profit From ForexAn Introduction To Breakout Trading On ForexPhilip Moore© Copyright 2012 London Forex Openhttp://www.londonforexopen.com
  2. 2. 2 © London Forex Open 20122 How To Use Breakout Strategies To Profit From ForexContentsIntroduction.......................................................................................................31. The Basics Of Breakout Trading......................................................................42. The Basic Breakout.........................................................................................53. False Break Outs ............................................................................................64. Range Breakout Strategies .............................................................................75. Key Points To Consider When Trading Breakouts...........................................8Conclusion .......................................................................................................10Copyright © 2011 London Forex Open. All rights reserved. Unauthorized ©2011 London Forex Open. All rights reserved. Unauthorized duplication orpublication of any materials from this website is express
  3. 3. 3 © London Forex Open 20123 How To Use Breakout Strategies To Profit From ForexIntroductionThere are many ways in which you can trade the Foreign Exchange marketsand a wealth of strategies and systems that can be used.All have the main objective of attempting to provide a consistent approach tomarkets that will be able to deliver profits although the actual approach whichis use may be very different.Of the many approaches that can be used for regular profit generation is thebreakout trading strategy.This trading strategy remains popular with traders for two main reasons. Thefirst is that it offers the potential to deliver high profits. The second is due tothe flexibility that this trading style offers. Breakouts occur in all market, notjust Forex, making the techniques of breakout trading universal.They can also be used in a wide range of market conditions. They do notrequire strong trending markets to yield a profit and with the correct profittargets and stop levels applied, can be worthwhile strategy to trade in volatilemarkets.In this guide we look at some simple applications of breakout trading strategiesand outline some simple rules to follow in order to make the most of thistrading strategy.Phil Moorehttp://www.londonforexopen.com
  4. 4. 4 © London Forex Open 20124 How To Use Breakout Strategies To Profit From Forex1. The Basics Of Breakout TradingBreakout trading strategies are one of the most popular Forex strategies usedby traders. They are primarily used to capture moves in the early stages of atrend when a currency pair is seen to move beyond a predefined level in themarket.This level can be a previous level of support /resistance or a move out of a amacknowledge market range that has defined previous trading boundaries.The completion of chart patterns, highs and lows in the market or even thepreceding trading session can all provide situations for breakouts to occur.The central concept behind a breakout is to capture the market momentumthat accompanies the break.Market orders are placed to be activated in the direction of the break when theprice starts to move beyond the established trading range. At this pointmomentum is anticipated to increase as increasingly, traders adjust theirpositions to back the market direction identified by the break.Essentially more buyers (or sellers) come into the market and increase themomentum of the move.
  5. 5. 5 © London Forex Open 20125 How To Use Breakout Strategies To Profit From Forex2. The Basic BreakoutA key benefit of breakout tradingstrategies is that they can be used ina variety of market conditions.This gives them a wide applicationand delivers plenty of opportunitiesfor profits to be made.They tend to work best at timeswhen high volatility is high and whenthere is plenty of market volume.These two factors are need in order to help ensure that sufficient momentumcan be generated following the initial break.It is this momentum that breakout traders look to capture as they look forcontinued follow through buying to build profits from the move.Breakouts are both a popular and important trading strategy because theycan also prove to be the starting point for new price trends in the market.They can be used on any chart time frame, from 5 minutes through to daily orweekly charts.
  6. 6. 6 © London Forex Open 20126 How To Use Breakout Strategies To Profit From Forex3. False Break OutsThe term False breakout is used todescribe a trading scenario where themarket looks to first breakout in theopposite direction of an anticipatedbreak before assuming the intendeddirection.For example, a ranging market maybe looking to break higher but insteadit initially breaks lower.This often occurs when the market is looking to take out established key stoplevels. It is also provides a good lesson in waiting for confirmation of thedesired break prior to entering a position.False breakouts are often traded in addition to conventional breakoutstrategies with both approaches offering an excellent method of capturingstrong, fast market moves.
  7. 7. 7 © London Forex Open 20127 How To Use Breakout Strategies To Profit From Forex4. Range Breakout StrategiesRange breakout trading strategiestarget an established range in themarket.Often markets will range for longperiods. When the range is finallybroker this can be accompanied by astrong break.Range breakout trading strategiesare also sometime referred to as boxbreakout strategies due to the characteristic shape of a box which is drawn onthe chart. If the market breaks outside of the box in either direction then abreakout is assumed to have occurred.Stops are generally placed some way inside the box to accommodate anysmall pullbacks as momentum builds.
  8. 8. 8 © London Forex Open 20128 How To Use Breakout Strategies To Profit From Forex5. Key Points To Consider When TradingBreakoutsHere are the five key rules you should make use trading breakouts to ensureyou are able to maximize your trading results with this strategy.1. Identify The Best Markets To TradeBreakout trading strategies work best when market volatility is high. Ittherefore stands to reason that this strategy these strategies are morelikely to succeed at the beginning of market session when volume andvolatility tend to be at their height.Also consider the currency pair you are trading. Some exhibit greatervolatility in their trading and so are more suited to breakouts. Forexample, trading the GBP/USD currency pair at the opening of theLondon markets will provide a greater chance of breakout opportunities.2. Have A Defined Entry PointUse a set method to define your criteria to enter the breakout. Dont betoo keen to enter the market but seek confirmation of the move first.Entering early can see you caught up in a false move.Placing your entry point beyond the break level or on a confirmedcandle close can provide added confirmation of the break.3. Always Trade With A Set Profit ObjectiveBefore entering your breakout trade you should know the level at whichyou are going to take your profits. This could be a set level that you usefor each trade (if using a set time strategy) or a calculated level which
  9. 9. 9 © London Forex Open 20129 How To Use Breakout Strategies To Profit From Forextakes into account the average moves at the time of day or importantsupport and resistance levels on the chart.As breakouts can often result in the start of a more dominant trend youit can be advisable to set multiple profit objectives on the trade. This willalso enable you to book some profits along the way.4. Define Your Entry RulesUse a defined method of entry for your trades and try to filter out theweaker signals. Breakout trading is a profitable strategy as the movesthat follow the break can bring big rewards. However you dont wantthese profits to suffer from chasing false moves.Only take the highest probability moves when the breakout occurs.Dont chase the market. If you miss the move then be patient and waitfor the next step-up to occur.5. Minimize Your Risk With StopsWe have already mentioned that False breakout moves often happen.Even though you should try to confirm the breakout before enteringthere are times when you can still get caught in a false move.To minimize this risk place a tight stop on your position. This could bebelow the prior break level (support/resistance) or the prior marketrange.Also dont forget to move your stops as the breakout gains momentum.This will help you to lock in profits.
  10. 10. 10© London Forex Open 201210 How To Use Breakout Strategies To Profit From ForexConclusionCapturing moves is only half the equation which equates to a successfulbreakout strategy. If you want to ensure your strategy is profitable in the longrun you need to back this up with good money management and risk controls.Breakout trading does not always have to target the big moves. You cancapture small profits from a break. However you should keep in mind the levelof risk attached and keep your stops tight.As with all forms of trading it is the slow and steady approach that will lead theto greatest gains in the long run.BiographyThe London Forex Open morning Forex trading system exploits breakouts atthe opening of the London Markets following the Asian market range.Find out more about how you can profit from trading breakouts as part of yourtrading strategy.Visit www.londonforexopen.com

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