Trading the Breakouts with great Success

There are currently hundreds of available trading methods out there that it will surely take you years of trying and defining what works best for you. 

Most strategies are the technical or mechanical type of trading style where the aim is to simply buy at the lowest price and sell at the highest price of the current market. 

The reason is that the behavior of the market often goes for a trend and comes back at the normal price level.

Some traders especially newbie think that they can make money by simply predicting the direction of the trend. Predictions offer a huge risk and often lead into a complete failure and lose of an account.

One of the best method that guarantee your success in trading the Forex market is to trade only on a high odds where there is a good confirmation of the trend’s direction. 

Try and observe your trading chart. You will notice that the bullish trend always starts in the same manner especially when it breaks through overhead resistance. 

Sometimes it even moves further making a new high and it’s the reason why it’s best to make a buy on breakouts.

Defining for buying at the right breakouts can be done with the help of your resistance levels. 

If the resistance has been tested several times in the past and held before the break then there is a high probability that a bullish trend continuation will mostly likely going to occur.

A six or more tests are already good enough to confirm the strong level of the resistance. The wider the gap of the tests in terms of time provides the best odds for the breakout to continue.

The Bolinger Band Breakout

Trading the Breakouts offers a very high reward and with a very low risk of losses because the stop loss is always close or near the level of resistance. 

If you managed to hit the high odds of a certain breakout then your profit can tremendously increase depending on how far the range of the market will trend.

You may simply choose just to trade on the break of resistance levels but you can also choose to use other tools such as momentum oscillators to further confirm the best signal that you wish to take.

News Trading Method

The market news can greatly affect the trend of Forex. Some of these news events do not provide much impact. 

It takes a long period of time on studies and experience before you can distinguish the effects of such news events that can cause a stir on the Forex market’s volatility.

News trading method is a strategy where traders often place their order before the exact time that the news event will occur. 

The type of order to be opened can be long, short or both. Through practice and experience, you can speculate the impact of the event on how the market will react.

To check for future news events, you have to visit a website offering a Fundamental Calendar. You can easily find them by searching the keyword “Forex Economic or Fundamental Calendar”. 

One of the most popular sites that offer this kind of services on the web is the Forex Factory. This is also a good place to participate on several interesting discussion and interact with the other members.

The Economic or Fundamental Calendar contains all future news events and it is the primary tool of the news trader. 

The date and exact time period of release are indicated on the calendar along with some details about the event.

Take note that some news doesn’t have enough impact that can influence the market to move. 

Opening a trade on this condition is a total waste of time and money for paying the spread of your broker. Anyway, this can be avoided by gaining more knowledge and experience.

There are two types of being a Forex trader which are the Technical and Fundamental. A technical trader doesn’t rely on any news events where their analyses are purely based on their charts. 

They are using various types of indicator tools analyzing the previous historic data of the market price because they believe that the “Market repeats itself”.

The Fundamental type of trader believes that the market is moved by events as what I have already explained on the first few paragraphs. They objective is to speculate the behavior of the market and open their trading position just before the news are to be released.

Choosing the type of trading style among the two could be difficult on your part. The best way to define the most suitable method for you is to try them and see if you can adopt.

Who say’s that you can do both of the method mentioned above?

Most successful professional traders are combing both technical and fundamental analysis and they claim to have the best performance on their trades. 

The strategy might be complicated enough for a certain newbie to be able to understand but all that requires is the effort to learn and gain the necessary experience.

Moreover, if you are a newbie trader then it is highly advisable not to trade by starting with a huge amount of capital because there is a very high risk that you will end up losing all of that investment. 

If you have nothing yet to invest or you just can’t afford to lose any money then you can create a virtual or demo account. 

Every Forex broker are now offering such account to let you experience how the market behaves and to familiarize yourself with their own trading platform.

Fibonacci Trading Strategy

I am a long time lurker of various forums and other active communities especially groups that discusses about forex trading. 

There are several friends that I made which are also a trader like me who are struggling to make enough money for a living. 

It’s too sad to say that we all know each other through a pseudonym or usernames that represents our identity here on the web. 

If you are not yet a member of the popular Babypips.com and the ForexFactory.com then you should sign up an account and try to interact with our fellow traders.

It is on these communities where I manage to learn some basic and advance skills that I currently posses right now. 

And lately, there was one thread that I found on babypips.com discussing about his strategy through a single indicator which is the Fibonacci tool. 

I have a discussion about this kind of tool on the post entitled “Using the Fibonacci Indicator tool to predict retracement and trend direction”.

This trader has been testing his strategy for several months showing his recorded results that are impressive and worth checking to look at. 

His thread has gone over a hundred pages and it could take perhaps months to finish reading them all. 

Although, they have provided some summary to follow when you wish to use the system but what I wanted to do is to make a revision starting from the scratch.

I will begin the testing process of this forex strategy on the next post providing the details and the necessary steps to follow. 

This will be my first project and I hope that you could contribute with the development of this project by providing your feedback on the comment form below.

Simple Forex Hedging Strategy

This is my first post about a strategy that I am willing to share and it’s the perfect choice for a newbie to try and experiment. 

Basing on the name of this simple method which is “Hedging”, it means that you are going to set two separate orders that will negate both of your profit and loss. 

You won’t be losing on this condition no matter where the direction of the market trend but you won’t either generate any profit.

This strategy is one among the most popular method being shared and discussed as well on various forums. 

You might have already encountered this proven technique basing on some trader’s feedback about the system. 

And if you are and you have great knowledge about it then I wish that you are willing enough to share your success regarding on how you are using it properly to gain profit. 

The comment form below is always open for everyone to let their opinions, additional information about the topic and any other concerns relating to the main subject of the post.

The following steps are the procedure on how to use the hedging strategy:

1. Open two orders at the same time. You need to be fast when you are going to use the “Market Order” function of your trading platform. 

A slow internet speed connection could be a problem where the result of your two orders could have a huge gap between them. 

Take note that the closer distance that you are able to open both trades are better.

2. An alternative option when you have a slow internet speed connection is to use the “stop order”. 

This function will allow you to set a certain level of price where the market might trend or touch triggering your both orders. 

The only drawdown is when the market trend has never touched that price and your orders are not triggered. Anyway, the best solution for this is to set a price nice the current price level.

3. After setting up those two trades, the next thing that you have to do is to wait until those two orders have achieved a total pip of 100 or even more. 

You can try a smaller amount of target but I find the best results on using a larger range of distances.

4. Finally, there’s a huge movement and let’s say that it moved around 100 pips. You now have on your winning side a worth of +100 pips (minus the spread) and -100 pips (minus the spread). 

Close the losing side and then re-open another group of hedge performing the same action from the previous steps.

5. We need again to wait until a movement occurs and when it happens that the previous losing order (not the newly opened sets) had returned back into its original position or gained a few positive pips then you have to close all active orders. 

You have already earned some profit on this condition and you can have rest to trade on the next day.

Forex Hedging Example

The only situation where you are going to lose on this forex trading strategy is when the losing side will continuously trend. I suggest placing a stop loss or a trailing stop to prevent further losses. 

Moreover, this is just the basic principle of the method and you can further tweak its system to provide more profitable returns with less risk of losses.