The Scalpers Checklist - breakout traders should first find support and resistance; Entries can be set as close as 1 pip above s/r values

The first key to scalping breakouts is to identify key levels of support and resistance. This can be done through a variety of methods mentioned in the 4th installment of the Definitive Guide to Forex Scalping. Once found, setting up a breakout trade is a straight forward process. In the event of a level of resistance breaking, traders will look to buy.

The big question is always where to enter into the market in the event of a breakout. Theoretically a breakout occurs if a level of support or resistance is breached by even 1 pip! This allows aggressive scalpers to get into the market as soon as possible. Some traders may flock to this methodology as it lets traders maximize their profits when a trade moves in their favor. However, getting into the market first also will expose you to be the first trader stopped out in the event of a false breakout. Traders that need further confirmation can wait for a 30 minute candle close and then make a decision whether to enter the market.

Overall, trading breakouts is an exciting way to approach scalping. It should be noted since breakouts occur during times of market volatility it is imperative to maximize your profits when the market breaks in your favor! This can be done byusing a positive risk reward ratio. This means traders should look to make more in profit, relative to what is being risked through the placement of a stop order.