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Trading the Breakout Strategy

2 October 2023, 20:02

Daniel Stein

2 384

A very popular approach in our trading community is to combine different FX power analyses.

This allows you to determine the trends of individual currencies and when to enter them best.

For this strategy, we use our next-generation FX Power NG, which is available for

MT4 👉 FX Power MT4 NG and MT5 👉 FX Power MT5 NG

The goal of our setup looks like this, and it contains a long-term analysis of 1 Week seen as a thick line,

a medium-term analysis of 1 Day as a thin line, and a short-term analysis of 4 hours as a dotted line.

There is a playlist on our YouTube channel that explains how to configure this chart setup with 3 instances of FX Power NG.

The breakout trading strategy

With the breakout strategy, we look for these situations where all 6 strength lines separate from each other. All 3 lines of one currency have to be either above or below all 3 lines of the other currency.

In this example all 3 USD lines are above the GBP lines, which means the USD is significantly stronger than the GBP, and so we short GBPUSD.

The white rectangle marks our entry, the moment where the breakout begins.

And that's how it looks in relation to the GBPUSD chart.

There are many more examples like that

Do you want to trade like this? Then have a look at our Breakout Tutorial Video

The video is in German, but YouTube provides excellent automatically translated subtitles for almost every language.

English tutorial videos will follow soon.

All the best
Daniel

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Daniel Stein 2023.10.03 09:16 #1

The weakness of the AUD provided some great opportunities during the tonight's Asian session and even before against the USD.

The big benefit of this strategy is that it suits intraday traders on M5 as well as part-time traders on H1.

All the best and have a great day, everyone
Daniel

Daniel Stein 2023.10.04 16:10 #2

Here are a bunch of trades based on our Breakout Strategy.

It doesn't work always, but the profits cover all previous SLs.💪

Daniel Stein 2023.10.10 08:40 #3

Good morning everyone,

Today, we’re facing a decreasing retail trading volume across all currencies. In the past, I used to say, better stay out and wait until the interest rises again.

But our Breakout Trading Strategy performs perfectly even under these circumstances. At the London opening, I noticed that the JPY was under pressure and weaker than most other currencies.

So I sold the JPY, and it worked perfectly, as demonstrated by the screenshots above. 💪

I scan and trade the Breakout Strategy on the H1 chart, but I post the screenshots with M5, so that you can see how the trades evolve, i.e. how low the drawdown is since we entered the trades, etc.

All the best and have a great day everyone

Daniel

Daniel Stein 2023.10.13 07:08 #4

⚠️ Update on today’s Morning Briefing ⚠️

Wow! What a fantastic trading day with tons of opportunities. 🤩

As written in the Morning Briefing, there has been a Breakout Setup on the CHF pairs, which we traded with 6 pairs.

Around 12 GMT+1 there was another setup on the GBP pairs, and right now, there is another one running for the JPY pairs.

That’s plenty of opportunities to let your account grow. 👍

Daniel Stein 2023.10.13 07:09 #5

⚠️ Update on today’s Morning Briefing ⚠️

That was a challenging trading day, but we managed to get some profits anyway. 💪

As written this morning, I took the CHF Sell setup in the early morning and kept the positions the entire day.

Three of them got stopped out (-3R), but the other trades covered that easily.

So, all in all, we’ll close that day with +2R of profit, which is pretty cool considering today's circumstances, and the outstanding “volatility” of the CHF pairs. 😉

Daniel Stein 2023.10.13 15:51 #6

⚠️ Update on today’s Morning Briefing ⚠️

What a day!

Our breakout strategy is outstanding and provides almost more opportunities than we're able to handle.

At 7 am GMT+1 I took an AUD Breakout setup on 6 AUD pairs.

At 10 am GMT+1 I took an NZD Breakout setup on 6 NZD pairs.

And at 2pm GMT+1 there was another Breakout Setup on 6 CHF pairs.

That's 18 (!) trading opportunities in just one trading day! 🤪

In my opinion, it can't be any better than that. 🤩

Happy weekend everyone

Daniel

Daniel Stein 2023.10.18 12:26 #7

What a wonderful breakout setup on GOLD. I seriously need to check my GOLD chart more often.

Daniel Stein 2023.10.18 15:50 #8

A few more trade examples of our Breakout Strategy

I know the Breakout Strategy offered a lot more opportunities, and not all of them worked out.

So I analysed the setups that worked, and those who did not, and found a significant difference between them.

I highly recommend everyone to have a close look at the history lines, and I'm 100% sure you'll see the same as I do.

Why don't I tell you right and save you the work?

Because I want you to understand what you are doing, and what this fantastic tool, FX Power NG, is capable of.

So take your time, and study your charts, and I'm sure you'll draw the same conclusions in due time.

Have a great day, and see you tomorrow.

Daniel

Daniel Stein 2023.10.19 15:14 #9

Here's one almost perfect trade setup for our Breakout Strategy.

Why just almost? Because the perfect entry could have been a few hours earlier. 🤩

Check the history lines in detail and compare it those trades where you missed profits. 🧐

You might be annoyed by that kind of research work, but it is essential that you'll find the solution yourself. 💪

Have a great day and see you tomorrow

Daniel

Oldseadog 2023.10.28 11:05 #10

I understand your initial stop on this strategy but am curious to understand what you use as a trailing stop.

Daniel Stein 2023.10.28 11:15 #11

Oldseadog #:
I understand your initial stop on this strategy but am curious to understand what you use as a trailing stop.

I mostly don’t use a trailing stop, but you can use FX Trend if you prefer one.

Daniel Stein 2023.12.14 08:38 #12

The Breakout Strategy works outstanding on Gold / XAUUSD

Here are a few trade examples of the past days.

11/12/2023

12/12/2023

13/12/2023

Daniel Stein 2023.12.19 15:33 #13

In this Breakout Strategy Setup, I awaited the NY opening, which led to the expected pullback in the opposite direction.

So I awaited the first bar close in the "right" direction and took the trade with a tight stop and a RR of 1:3.

In hindsight, I could have achieved more, but I'm happy with the result and the profits achieved.

It's no rocket science, and everyone can follow these simple rules. So get FX Power and give it a try. 🙂