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Breakout Strategy - The Pro's Way

  • #121
  • Nov 6, 2006 11:26am Nov 6, 2006 11:26am
OK thankfully, we have actually had some movement which is tradeable....

We had a nice short trade setup this morning, which I took and bagged my 20 points for the day....

Hopefully now the NFP is out of the way the markets will return to some normality and we'll start getting the sort of Daily Ranges that present good trading opportunities.

Anyone else do well today trading a breakout?
  • #122
  • Nov 6, 2006 10:02pm Nov 6, 2006 10:02pm
just a quick question for you guys:

based on what i've read in the thread, there are 2 ways of playing breakouts:

a) price breaks S/R, then wait for a retrace to the broken S/R for entry

b) price closes above/below S/R, enter on the next candle/bar as it heads in the same direction

well, being a stock trader, i was trained to handle breakouts differently:

c) given S/R level, place a buy/sell stop 5 to 10 fluctuations (pips) above S/R

is there anyone here who trades like this? is this method less effective than the ones given above (a and b)? i was thinking that the main benefit of using a or b would be that you would have a lot less false breakouts. anyway i'd appreciate if anyone could give some input on this, thanks!

Nat
  • #123
  • Nov 7, 2006 4:57am Nov 7, 2006 4:57am
Nat,

I can't speak for your method or method A but my method is definitely designed to protect against fakeouts. I basically am looking for the more sustained moves and this is how I decide which are real and which are fake.

It works well too.
  • #124
  • Nov 7, 2006 12:37pm Nov 7, 2006 12:37pm
Today was another good day... It wasn't simple but I made my 20 pips profit for the day.

I woke up this morning with a massive dilemna. The GBP/USD had moved during the Asian session and I ususally hate to see this, I prefer to see a nice consolidation period and some definitive levels to trade from.

Any how I decided to leave the morning alone and come back at around lunch time... Much to my delight I came back and saw a nice 2 point resetance line which if you took back far enough could see that it had been both support and resistance in the past. I also saw a mini double bottom... This was good enough for me to have confidence in a break.

At 2pm we got a confirmed break and the next candle gave me my entry signal. I was in for 30 mins and my first profit target had been hit, so I took one lot off the table and the moved the second lots stop to breakeven.

Unfortunately that got stopped out at break even but at least I got my 20 pips in te bag :-).
  • #125
  • Nov 9, 2006 1:30am Nov 9, 2006 1:30am
I've been trying something new for a while. Since last spring or so i'd been including the box play setup in my arsenal. Lately i've been testing setups in the Asian session, then leaving audio alerts to set off if a setup takes place, checking it out, and going back to bed and letting it run to limit or stops and seeing what took place upon rising. I just started actually taking screen shots this week, so i have two trades up. One for +18 pips on the 7th, and last nite's trade below for +10 while i slept. I must state that over the weeks i've been trying this out it is nice to rise and shine with the trading for the day taken place already (I'm Pacific time, and London is what the box plays usualy play out in so far).

Cheers,
Thom

http://www.accrete.com/fx-atm/atm-tr...t2006nov08.gif
  • #126
  • Nov 9, 2006 8:11pm Nov 9, 2006 8:11pm
Hey guys. I've been following this thread for some time reading and learning about breakouts. As mainly a trend following trader, I have found that breakouts on FX are much more profitable. But I have one question.

What do you guys use for exits. Yes, a simple target is great, and profits are made, but what about things like price action, or a dynamic trailing stop? Maybe the previous days H or L, or current day H or L (whichever is higher / lower).....

Something to that effect?

Thanks for the help guys!

mrLogik
  • #127
  • Nov 10, 2006 2:36am Nov 10, 2006 2:36am
Quoting mrlogik
...What do you guys use for exits...mrLogik
You might find of interest this article by John Carter on his Box Play setup. Very detailed and specific, easy to follow rules for entry and exits.

: ) Thom
  • #128
  • Nov 10, 2006 10:11am Nov 10, 2006 10:11am
Accrete,

Thanks for the link. I'm going to read over it now.

mrLogik
  • #129
  • Nov 10, 2006 2:50pm Nov 10, 2006 2:50pm
Always the hardest part of trading, a couple of methods that you could use is a 161.8% Fib Expansion (opposed to extension), which I use if I know I won't be around to monitor the trade and need a fixed target, or for strong breakouts a 11 ADX can serve you well, exiting when it turns down.

NZDUSD might be a nice breakout pair on open next week.

Quoting mrlogik
Hey guys. I've been following this thread for some time reading and learning about breakouts. As mainly a trend following trader, I have found that breakouts on FX are much more profitable. But I have one question.

What do you guys use for exits. Yes, a simple target is great, and profits are made, but what about things like price action, or a dynamic trailing stop? Maybe the previous days H or L, or current day H or L (whichever is higher / lower).....

Something to that effect?

Thanks for the help guys!

mrLogik
You can quit and they won't care, but you will always know.
  • #130
  • Nov 11, 2006 9:08pm Nov 11, 2006 9:08pm
Mr Micardio.. newbies here
Thanks coz create nice thread..

I have a request.. Can you summarize your trading system to us.. What i mean..

Your trading setup.. TA setup.. entry setup and exit setup..

Thank
  • #131
  • Nov 12, 2006 9:49pm Nov 12, 2006 9:49pm
Anyone else watching this nice set-up?

http://img213.imageshack.us/img213/2841/nzdusdrn3.gif

You can quit and they won't care, but you will always know.
  • #132
  • Nov 13, 2006 12:58pm Nov 13, 2006 12:58pm
Hi , I have been reading though the thread , i also trade a system close to micardio s, i trade cable ,15 min candles, take 20 pips a day sometimes less, but i also leave 20% left to ride the bigger move, i am having great sucess and would like to know how others trade or use similar ways,

I wait for a close for support or resistance wait 5 pips for entry, but entry is sometimes stalled due to pivot pionts or previous days high and low points. I like to have clear water trades with no point of reference to stop it.
  • #133
  • Nov 13, 2006 1:01pm Nov 13, 2006 1:01pm
Yup I saw that and took the short trade this morning... I finished the day aproximately 70 pips in profit. Not to bad for a days work :-)....

So lets open this up again.... Who trades breakouts consistently and has managed to carve out consistent profits for a good period of time?????
  • #134
  • Nov 13, 2006 1:13pm Nov 13, 2006 1:13pm
Quoting Micardo
Yup I saw that and took the short trade this morning... I finished the day aproximately 70 pips in profit. Not to bad for a days work :-)....

So lets open this up again.... Who trades breakouts consistently and has managed to carve out consistent profits for a good period of time?????
Nice start to the week, took 20 pips off at 1.9070 and took the rest at 1.9000 ,

I have been trading this system for a year now, going great dont have many losing days, if i have a loss , i normally get it back on a re entry when it comes back to my previous entry point, or the high or low of that point.
  • #135
  • Nov 13, 2006 2:20pm Nov 13, 2006 2:20pm
micardo did you take the kiwi short based on 15 min chart,

thanks


Quoting Micardo
Yup I saw that and took the short trade this morning... I finished the day aproximately 70 pips in profit. Not to bad for a days work :-)....

So lets open this up again.... Who trades breakouts consistently and has managed to carve out consistent profits for a good period of time?????
  • #136
  • Nov 13, 2006 2:41pm Nov 13, 2006 2:41pm
You know what i'm an idiot... I took a quick glance and assumed that was the GBP/USD which had a similar pattern. Sorry guys... but looking at it I would of taken the short had I been trading that pair.

My whole philosophy is to trade just one pair though... I am attempting to master just one pair. Eventually I will incorporate fundamentals into my trading and I feel that trying to do this with 5 or 6 pairs is not realistic whereas if I just master one pair (2 countries) then this is possible.

But in answer to your question I trade only from 15 minute charts.... I look at 1hr, 4hr and daily charts to get a feel for the overall trend but enter from a 15 minute chart.
  • #137
  • Nov 13, 2006 2:43pm Nov 13, 2006 2:43pm
Forex77, do you trade breakouts exclusively? Are these breakouts of support and resistance or bollinger bands or what?

What pairs do you trade?
  • #138
  • Nov 14, 2006 2:39am Nov 14, 2006 2:39am
Quoting Micardo
Forex77, do you trade breakouts exclusively? Are these breakouts of support and resistance or bollinger bands or what?

What pairs do you trade?
Breakouts i find works for me ,so very rarly trade any other way, i trade breakouts of the most obvious lines of support and resistance of price movement, 1 rule i have is i dont get invovled in a trade if a news release is due in a hour .even if the setup is there, mainly on cable but sometimes there is a better setup on euro/usd but i go for less profit beacuse the range is not as high as cable.

I use MACD as a indicator to show me if there is any divergence , also fib lines when possible , i have 34,55 and a 200 dma.

How about yourself what works for you.

Ian
  • #139
  • Nov 14, 2006 6:25am Nov 14, 2006 6:25am
wow... That sounds like mine.... apart from the MACD and Fib lines... I have the same moving averages though.... Where did you learn this? Were you a member of Forexbastards as well?

So do you do this for a living now?
  • #140
  • Nov 14, 2006 10:36am Nov 14, 2006 10:36am
[quote=Micardo]wow... That sounds like mine.... apart from the MACD and Fib lines... I have the same moving averages though.... Where did you learn this? Were you a member of Forexbastards as well?

Forexbastards not heard of it before. I learnt it from a top professional fx trader, he left the city life and started to teach a few traders and works from home now, we are in contact on a daily basis, i learnt everything from him.

I also do this full time now , nice to meet someone who share a similar system. Maybe can go over things sometime, do you live in the uk.

Todays trade was a frustrating one, i entered short at 1.8967 i missed my target at S1 ( pivot point ) it just spiked so didnt get out, then went sideways until the usd news at 1.30 i waited till 5 min before and exited at 5 pips minus just as well it shot up, but re entered on the same entry point and exited for a 15 pip gain, not the best day but not the worst.

How did you all get on
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