In this video you'll learn that breakouts are hints and clues that the human psychological reaction has been activated. At the first sign of a strong breakout or movement, the emotions to do something just becomes intense.
Below are the steps to understanding a breakout :
1. Identify the Setup
Take some time to truly understand what kind of setup you're dealing with. Is this going to be a Range Breakout? Is it going to be a Trendline Break? Will it be a Channel Breakout? Or are we working with a Support and Resistance Breakout? Each trading set up has so much detail that we sometimes just tend to overlook it. An example is when working with a range we know we first require 4 points of reference with no Higher High and Lower Low sequence.
2. Get a Clear Understanding of the Timeframes Above
A very common attribute to dealing with breakouts is, when a strong breakout happens, just above or below the breakout zone will be a major support and resistance level from the big boys. This little piece of information is overlooked by many of the traders I've come across. This information will be helpful to understand if the breakout that occurred has any chance to succeed to begin with. Knowing this information ahead of time can make all the difference in a losing trade or a winning trade.
3. Feel Your Opposition Throw in the Towel
If you're looking to sell, follow what the buyer is doing every step of the way until they call it quits. When your opposition starts exiting their positions you have less roadblocks ahead of you. This is probably the most important core in trading which I've seen many of my mentors and traders I have studied, look at. They love to get into the head of the opposition to see and wait patiently for the right moment to move in.
4. Up Your Game
Breakouts will generally get you entering late into the market. If you focus on the 3 points above, you might be able to grab a entry before the breakout as shown in the video. Learn to up your trading game every day. Practice, learn and be hungry for more knowledge and skills. Trading constantly evolves, your approach to the markets should be able to adjust as well.
Watch the video above for the full lesson so you can continue to enhance your skills and be better everyday.
Be conscious of your trading!
Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. Urbanforex will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.<7p>
Editors’ Picks
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EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
USD/JPY goes on a roller-coaster ride prompted by geopolitical risk
USD/JPY whipsaws lower and then higher on alternating risk-on risk-off caused by Middle East tensions. Governor Ueda talks about defending the Yen from further weakness and currency-induced imported inflation. USD/JPY price chart shows bearish Hanging Man forming, boding ill for future price action.
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.
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