Can False Breakouts be Prevented? | Forex Factory

  • Can False Breakouts be Prevented?

    From dailyfx.com

    Breakout trading has become popular as traders await many pairs to breakout from their consolidating ranges. Trading a breakout strategy is fairly straight forward; traders will look to buy a breakout of price above resistance or sell as price breaks through support. However, there is one question on the back of everyone’s mind. How can I avoid false breakouts? A false breakout occurs when prices moves through a support or resistance level and proceeds to immediately move in the opposing direction. Below we can see a false breakout on the EURUSD pair. Support was consolidating throughout early trading as denoted by ... (full story)

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richhand
Apr 27, 2012 5:45pm
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This is aimed at new traders and most new traders are taught to risk a % of account balance so that wider stops lead to no greater loss if hit. Focusing on pip loss you would have a set volume at risk per trade.
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Mike Haran
Apr 28, 2012 3:49am
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Honeytrap title but morphs into a crap article where the so called "Trading Instructor" recycles an article about risk control. By the way this is the same man that wrote about a Gartly pattern that had you traded it would have cost you a 100 pips of stop. Looking at the example I can see that the trend in this pair is up, so why would you sell it? Well, if you read 90% of the crap books on trading you will see this sort of useless knowledge being banded about by fools that can't trade but can talk a big story. In short the trend is UP look to BUY and when its DOWN look to SELL. Once I stopped trying to fight the market, I started making money.
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Trader#0C5E
Apr 27, 2012 5:11pm
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To make the answer short 'n sweet:
NO, IT CANNOT.
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Trader#C896
Apr 27, 2012 7:08pm
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wait for pullback. simple..
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