Breakout Forex Trading Strategy

Breakout trading system is the simple strategy, every trader can use this trading system easily. In forex arena there are so many ways to do breakout trading, one of the most my favorite system is support and resistance channel. This strategy only takes small or limitless time, you can still do any activity without spend all days in front of your computer. in this article I will share about using high low breakout in trending movements.

First of all, we must find the major trend in daily time frame chart. High low trading system is made to get entry trading positions with follow the market trend and wait the market price breaks from a support or resistance level. In the basic rules, we only find sell trading position in bearish trend and find only buy trading position in bullish trend. Just like our main rules, first we are going to do is looking the major trend or the main trend, to do this we can use forex technical indicators to assist us. The main or the basic trading tool to find the main trend is the moving average indicator. In the bellow trading example we use 200 moving average on GBPUSD pair. The market trend is analyzed to be bearish trend because the market price is moved bellow the moving average indicator. Just bare this in your mind that when the market price is above the moving average in case we only look for buy trading position. Moving average indicator is the most important trading tool in this system.

Now secondly, after we get the major trend and the trading position direction then we are going to find or to determine support or resistance level. In this case you can use donchian channel indicator as a technical indicator that can be used to any chart. This indicator is use to determine current levels of support or resistance by determining the low or the high on our trading chart. Donchian channel indicator is an accurate trading tool for determining potential breakout point.