Disliked@Verv Ah I see, you basically look for that break of support or resistance then. To be honest, it's something ive never tried. How's it been going for you? Sounds extremely logical.Ignored
Sorry that sounds corny, but I think it is true.
There is an edge in breakouts, several people on the forum have said this, Petercrown, TheRealThing, Pipeasy. I didn't just take their word for it, I already had the data from my manual testing, so I know those guys aren't bull spitting.
I actually was testing an intraday strategy to use limit orders lol, my testing focused around looking to buy at support and sell at resistance, using previous daily highs and lows as objective levels, with a 1:2 risk:reward. Somewhere into the testing I realised that it wasn't working, and actually the reverse of what I was trying to do i.e. breakouts was better. I correlated breakouts with high impact news events for 2.5 years of data, and in the three currencies I tested results where clear - breakouts had a theoretical edge, fading did not.
The reason why I said theoretical edge is that slippage ruins the edge in intraday breakouts. If you have a great broker, that fills you exactly at the prices you want, you will make money, lots of it. This isn't an idea world, and my broker was slipping me 10-22 pips on big news which killed that system. But if you take that up to higher time frames, any slippage has much less impact on overall cost and profits. I found a better broker, that doesn't slip as much either, that broker which now is in administration - can't write this lol .
It's not intuitive to buy as price goes highers, or sell as it goes lower. You always hear buy low and sell high, but with leverage fading price can be a disaster. Fading without a trend filter doesn't work, I already know that, but based on what I have tested, it might with a trend filter, but I would argue that the breakout system would work even better.
I think of it as stacking as many small edges in your direction. Breakouts have an edge for a couple of reasons.
The other important thing is running winners. Last time I checked, my stats where 30% winners, vs 70% losers, but my average winner was 6-7 times my loser.