A Step by Step Guide to

Trading Breakouts in Forex

WHAT ARE FOREX BREAKOUTS?

• We have a breakout when the

price of a Forex pair

overpowers and eventually

breaks out of a specific

psychological level.

WHY TRADE FOREX BREAKOUTS?

• Breakouts often lead to new price moves and trends. In this manner, traders attempt to enter the market right when a breakout occurs in order to get in early on a potential emerging trend.

WHERE DO BREAKOUTS OCCUR?

o Supports or Resistance

o Time Highs or Lows

o Trend Lines

o Price Channels

o Moving Averages

o Chart Pattern Levels

o Fibonacci Levels

o Pivot Points

o Round Numbers

Price Breakout from Support Zone

REAL BREAKOUTS

• As a general rule, a candle wick beyond a psychological area is not a breakout. I consider a real breakout to occur only in situations when the price of the pair closes the candle beyond the level.

Real Breakouts occur with Strong Momentum. Watch Out for Wicks around Breakout Zones

4 Steps for Confirming Forex

Breakoutscc: Vox Efx - https://www.flickr.com/photos/39096030@N00

Ascending Triangle Breakout and Pullback to Prior Resistance

Strong Downside Breakout with Bearish Divergence

Check Out the “IN DEPTH”

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