Breakout Strategy - The Pro's Way

Thanks people for your input so far..... I thoght I should elaborate a little more on my take profit.... When I say take profit at 20 pips I mean I take 1 lot off the table and the leave the second lot on but move the stop loss to break even. I usually trade with 2 lots.

Also I understand that people say that once someone has a profitable system they don't share but to me that makes no sense.... I mean if they have a profitable system then why would it matter if others were doing the same thing. This market is so big that I hardly think we could make a dent, and even if we could then surely that would be positive for us. If we all buy at the same price the market will move up we all make money :-).

I didn't start this thread looking for someone to spoon feed me success. I already have a system which seems to be profitable but I am only demo trading it and as everyone know everything changes once you are live. One of the hardest things to do is have confidence in a system once it has hit a loosing streak and keep implementing the same system.

You see it probably wouldn't be the system.... the markets don't do what we tell it and sometimes we just have to accept that. But to start jumping from system to system is where newbie traders start to go wrong and sometimes never find their way out.

So all I was looking for was other traders using breakouts to be consistently profitable which in turn would give me that confidence that it can be done.

Well today was a great day for me.... I was in and out by about 10 oclock this morning with my profit in the bag, and a 1 lot left to ride the bigger move .

How did you guys do with your breakouts today.

TwoBlink, you are being to modest, i've enjoyed your posts over these past months you've been here at FF. For myself, i just don't get the "keep your success to yourself" mentality either. And as i recently posted in another thread, i fully intend on sharing whatever profitable knowledge may be helpful to my FF-family. It would take a whole lot more than our 10K or so active traders here at FF to ever move the market much more than a few pips at a given time IMO. So why not give out what i use/know if profitable? I think of James16, FijiTrader, Dialist and so many others. What if they had not been generous with their knowledge? I attempt to live my life online here at FF the way i do in my real life at home; "find a way to make someone's day".

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Back to thread. When i trade in-the-moment/session breakouts, i find the 15m chart ideal. Though my primary trading style for sometime has included the basic "indicator" breakout and can be used on just about any time frame i use it primarily on 60m charts for my "Day" trading, and 15m for session trading (I.E. NY open breakouts). Otherwise i'm looking at the hourlys (though i have things i observe on the 30m and dailies also as heads up. but for a strick session breakout, 15m is my favorite.)

: ) Thom

No offese here Thom, but they also charge for their knowledge. It isn't quite the same as sharing openly.

Nice job! I'm currently up 75 pips for the day and am enjoying "riding the wave".

Missed the original breakout, got in short later on a 4h-Vegas-Tunnel method slope change.

Just wanted to post a chart that shows an example of how you can trade wedges/triangles, because today had a really nice one that just completely went without fuss(which I find rare, usually price fights more than just 10-20 pips back).

I'd take profit at key support levels or using fibs / important EMAs, not arbitrary pip counts. Just my 2 cents.

I don't trade breakouts alone nor do I trade for a living.

Attached a chart of todays move / recent price behavior:

Twinchell,

Thats excellent... I think a thread like this where people can come and openly see other peoples success is important form many of the reasons stated earlier.

Sometime we just need the reassurances that what we are doing is making other people successful and we are not just experiencing beginners luck. It all helps when it comes to those lossing streaks. It helps us to have confidence in our systems to carry on going.

I like a good break out Micardo. For me the key to break outs is knowing what kind of market you are in. Obviously trending markets are the best. Having a clear number for support under the break out is key to controlling losses for me. Also a good technical profit target or a good mementum measuring strategy for exits helps me maximize the winners.

Point taken TC, and as with yourself, i also do not take offence easily, though on their defense they do have public areas also. All is well on this end. For myself their "fee" in the PF is part of my "educational expenses" so it's not a bother and well worth it to me.

I missed last nite's drop on the Eur/Usd which i watch mostly as i usually let things get into a grove after opening day before entereing if there is a set up. Though placing a simple TL alert would have at least brought me to the charts around 08:30 C.E.T. after breaking down from prior support at the 1.2590 ish area.

: ) Thom

Today seems to of been a great day on multiple currency pairs for breakouts. I can't help but fall in love with these sort of setups :.

Honestly though do you guys think that one can consistently profit from just trading the perfect breakout setups?

As long as your winning % is at least 50% and you have at least the same amount of pips that you take on wins that you have on losses you cannot lose according to simple mathematics.
If you win more than 50% and close after more than 100% of your stop size, then you must make profit.

It's up to you to find out if you have the discipline to do so.

Best of luck from me,

SeekingLight

Seekinglight,

Thank you for your input.... Although I knew those figures before I never really thought about it like that... Does that sound strange?????

But seriously that was a great post although simplistic it shows that it really is the trader themselves who make this forex phenomenon work and not the systems.

Breakout trading is the best possilbe method for so many reasons. Firstly, you need to rid yourself of all indicators. They are useless BS. All you need to do is trade breakouts of S/R based on the time of day you are trading. That's what I've been doing for quite sometime now. The best place to trade is AFTER the news has been digested. NEVER anticipate. You'll get killed. Trade the breakout and get out when divergence or an alternate breakout tells you to. Best thing to use is line-on-close trendlines. After 10 years of trading and relentless study, I've learned that nothing in TA works better than line-on-cloes trendline breakouts. When proper MA is applied, you simply can't do any better. All the fancy indicators in the world are no match for a prudent trader and her brains. Trading is so much easier than we want i to be. We ASSUME that we need complexity. Yet its exactly the opposite.

-Liz

I have only been doing this for a year but putting forth a great effort (in my opinion) because I see tremendouse opportunity. But I have been thinking on the same line as you Liz. Hmmm. Interesting way to put things.

Thanks

Tom

I have found a cup that does not leak... Is it the Holy Grail? I will be able to answer that before the end of the year.


As far as sharing openly, vs charging for it; I understand those who charge for it. The REASON is, what you say is BS until you charge an obseen amount for it, then is "professional advice". Free advice is generally not given equal weight as paid advice. Although how much you pay for the advice, and the quality of the advice have no correlation whatsoever.


I have posted perhaps 1% of the research I have done. I'm honest, my FX account is less than $5K. My "market influence" is pretty much less than a pip in any market. So it doesn't bother me one bit.

I have students that trade for banks; $300M throwdowns. I tell them to be careful, as they do have influence over the market. One of my students accounts for roughly 10% of the Taiwan Dollar <->$USD trading. He has influence.

The only influence I have though, is over people's minds. I have adopted Bill FitzPatrick's (www.success.org) attitude: "Some will, some won't, so what? Next.." BTW, if you have never done his FREE courses, you should. Great advice, and life changing.


I have cleared all the junk off my charts (I've "Unpimped my chart") and I just let the price action whisper its secrets into my ears now.. I encourage everybody to do the same..

Unpimp your charts!!

http://www.rueskitchen.com/images/uploads/ya.jpg

I have attached a file of a break out strategy that I use with the gbp/usd eur/usd & will be looking at the usd/chf. Just to explain a few things the red zone is the currency movement between the close of the day 5pm eastern and the opening of the London session 2am eastern. Most of the time unless I see a trend forming I do not place a trade before then. I use that time to establish more immediate points of resistence and support. This normally covers a 25 pip range with a false break out it can widen. Once it breaks the red zone by 10 or 15 pips I enter into the trade. What I am actually looking at it a 15 min time frame to open in the 10 to 15 pip area. One thing I have noticed is that some times you can get a false break out and have things reverse at 2:45 eastern time. Why that time I do not know I can see why the reversal at 3am because another session opens. Any way I look to get 30 to 50 pips off of it depending on when I enter the trade. Meaning how far I am from the days high or low depending on if I am going long or short. The GBP will run 100 to 140 pips several times a week and I try to get my safe pip count during such a run. Yesterday I over slept and got up at 2:30 am and got in the trade at 1.8777 instead of the suggested 1.8799 entry point marked EPT . I exited out of the trade at 1.8736 for 41 pips. Beings that I head off to work before 7am eastern I normally try to close my position for the day. Still working on a comfort level to walk off and leave my trade open for the New York session. I do put in a trailing stop at 25 pips with it moving every 10 pips. Again with the Gbp I have found that about 80% to 90% of the time once it retraces beyond 30 pips the run is over. And if it does continue it normally does not gain too much more then 20 pips beyond the point it started its 30 or so pip retracement. I also use supports, resistence, pivot points, and fibs from the previous day for added comfort to when I enter the trade. The tag marked 1.8815 is the pivot point based on the prevous days high low and close. Any additional info is appreciated. I have done back testing on this and am putting together some final analysis. I will see when I get it done. Another fella mentioned about if the GBP moves 50 pips in one direction it's pretty much going to finish the day that way. Just another thought for break outs.

Hey, Twoblink,

"Obscene" is spelled "obscene", not "obseen". Good God, what the Internet has done to grammar, never mind intelligence.

It makes me wonder if the SAT scores of the people I am taking forex advice from were higher than mine, or obscenely lower...

Maybe you should take your ass back to academia and have a literary professor teach you how to trade...

OOPS

On my chart I has r1 & r2 it should have been s1 & s2.