What does the term "Breakout" mean in Forex | Forex Factory

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What does the term "Breakout" mean in Forex

  • #1
  • First Post: Nov 29, 2018 12:07pm Nov 29, 2018 12:07pm
All,

Still new to Forex and busy learning about all things Forex, but a term I've come across quite a lot is a "breakout" in terms of analysing trend lines on charts etc.

What does this term actually mean?

Thanks in advance.
  • #2
  • Nov 29, 2018 1:14pm Nov 29, 2018 1:14pm
Pictures speak a thousand words!

https://www.forexstrategieswork.com/...-Breakout.jpeg

https://i.investopedia.com/inv/dicti.../breakout1.gif

http://newforextrends.com/wp-content...-breakout.jpeg

Basically, it's when the price "breaks out" (for lack of a better term) from a defined trading area
  • #3
  • Nov 29, 2018 2:23pm Nov 29, 2018 2:23pm
Many thanks lolpie, your diagrams have made it clearer now, particularly the diagram showing the resistance lines.
  • #4
  • Dec 3, 2018 1:35am Dec 3, 2018 1:35am
A Breakout refers to a security's price movement through a historical resistance level. A breakout typically precedes heavy trading volume and increased volatility.
Attached Image
  • #5
  • Dec 3, 2018 2:45am Dec 3, 2018 2:45am
Thanks for the explanation DwainUK
  • #6
  • Dec 11, 2018 1:11pm Dec 11, 2018 1:11pm
The breakout in forex mean there is a big change in forex trend..
  • #7
  • Dec 19, 2018 3:37am Dec 19, 2018 3:37am
When you finally figure out you won't make any money trading support/resistance lines, then a breakout occurs when price breaks outside of your defined standard deviation. Standard deviation refers to the size of the range of price in accordance to the percentage of price you wish to track. So, if you want to know where X% of all trades will occur, by their price, then the breakout will be shown when price exceeds that range, also known as a control limit. Support/resistance is drawn against finished trades, so it is fake, unless you can go back in time. Standard deviation draws against the current trade. It is best used in conjunction with an oscillating indicator that follows the full range of price movement. When the oscillating indicator breaks outside its standard deviation, you have a breakout in price. Good Luck.
You cannot be extraordinary by being normal
  • #8
  • Dec 23, 2018 6:47am Dec 23, 2018 6:47am
Quoting DwainUK
A Breakout refers to a security's price movement through a historical resistance level. A breakout typically precedes heavy trading volume and increased volatility. {image}
Exactly, that’s the real example of breakout. By the way, be aware of fake breakout setup during breakout trading; always remember: there is nothing like obvious in Forex! In addition, breakout trading is so channeling; need more practice before playing with your real money.
  • #9
  • Dec 23, 2018 9:41am Dec 23, 2018 9:41am
And often after the break out price bounces from the area that it broke. Or in other words: Supply or demand turns into demand or supply. I hope this helps!
  • #10
  • Dec 23, 2018 11:36pm Dec 23, 2018 11:36pm
Quoting BasicConcept
And often after the break out price bounces from the area that it broke. Or in other words: Supply or demand turns into demand or supply. I hope this helps!
This is; one of my favorite trade setup! Although, this kind of trade setup is not available here & there. But when I get this kind of setup then I enjoy this trade setup since the SL level is very clear.
  • #11
  • Dec 24, 2018 1:25am Dec 24, 2018 1:25am
Quoting GeorgeBaile
{quote} This is; one of my favorite trade setup! Although, this kind of trade setup is not available here & there. But when I get this kind of setup then I enjoy this trade setup since the SL level is very clear.
It also makes sense since the breakout indicates a sign where supply or demand overweighted demand or supply. After the breakout you watch how price retraces back to the breakout point (aka. decision point where price decided to break that area) and you can often have a small stop with a large gain with all other factors that you consider worth watching match your idea.
  • #12
  • Dec 25, 2018 4:05am Dec 25, 2018 4:05am
Quoting BasicConcept
{quote} It also makes sense since the breakout indicates a sign where supply or demand overweighted demand or supply. After the breakout you watch how price retraces back to the breakout point (aka. decision point where price decided to break that area) and you can often have a small stop with a large gain with all other factors that you consider worth watching match your idea.
Exactly, that’s the scenario! By the way, H1 & H4 are my most favorite time frame for applying this trade setup.
  • #13
  • Dec 25, 2018 4:31am Dec 25, 2018 4:31am
Quoting GeorgeBaile
{quote} Exactly, that’s the scenario! By the way, H1 & H4 are my most favorite time frame for applying this trade setup.
The higher the TF, the clearer the structures but you could apply this to any TF since the principles are the same :-) Good luck and if you need more help, just let me know!
  • #14
  • Last Post: Dec 26, 2018 3:33am Dec 26, 2018 3:33am
Quoting BasicConcept
{quote} The higher the TF, the clearer the structures but you could apply this to any TF since the principles are the same :-) Good luck and if you need more help, just let me know!
Thanks a lot mate; I liked your approach! Surely, I’ll knock you if I need any help.
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