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>

Education feed

Editors’ Picks

EUR/USD holding above 1.18 ahead of critical US data

EUR/USD is holding onto its gains, trading above 1.18 as the dollar remains on the back foot. ADP's US job report and the ISM Non-Manufacturing PMI provide critical clues toward the Non-Farm Payrolls. Fiscal stimulus talks and geopolitics are also in play.

EUR/USD News

GBP/USD trades around to 1.31 amid dollar weakness, ahead of data

GBP/USD is trading around 1.31, recovering as the dollar retreats. The UK government is under scrutiny for its management of the virus crisis. Services PMIs on both sides of the Atlantic are eyed.

GBP/USD News

USD/JPY: The return of the dollar’s sell-off

Japan July’s Jibun Bank Services PMI came in at 45.4 from 45 in June. US ADP survey and ISM Non-Manufacturing PMI coming up next. USD/JPY is bouncing from fresh weekly lows, risk skewed to the downside.

USD/JPY News

Editors’ Picks

EUR/USD holding above 1.18 ahead of critical US data

EUR/USD is holding onto its gains, trading above 1.18 as the dollar remains on the back foot. ADP's US job report and the ISM Non-Manufacturing PMI provide critical clues toward the Non-Farm Payrolls. Fiscal stimulus talks and geopolitics are also in play.

EUR/USD News

GBP/USD trades around to 1.31 amid dollar weakness, ahead of data

GBP/USD is trading around 1.31, recovering as the dollar retreats. The UK government is under scrutiny for its management of the virus crisis. Services PMIs on both sides of the Atlantic are eyed.

GBP/USD News

USD/JPY: The return of the dollar’s sell-off

Japan July’s Jibun Bank Services PMI came in at 45.4 from 45 in June. US ADP survey and ISM Non-Manufacturing PMI coming up next. USD/JPY is bouncing from fresh weekly lows, risk skewed to the downside.

USD/JPY News

BTC/USD is on the verge of a massive breakout towards $10,000 or $8,000

Bitcoin has already lost a significant portion of its dominance against other altcoins. After trading sideways for such a long time, many coins are taking advantage of the situation to create massive rallies. 

Read more

XAU/USD bulls unstoppable, renews life-time highs near $2040

With ‘buy the dips’ emerging as the main underlying theme behind the gold (XAU/USD) price action so far this week, the bulls flex their muscles further to record fresh all-time highs near $2040.

Gold News

RECOMMENDED LESSONS

7 Ways to Avoid Forex Scams

The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?

What Are the 10 Fatal Mistakes Traders Make

Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.

Strategy

Money Management

Psychology