Breakout Trading Strategies

breakout trading strategies are timeframe independent. Meaning, depending on the availability of time and your chosen style of trading, you can trade breakouts on any time frame regardless if you are using a day trading or swing trading strategy.

You see, the bulk of the time you will find Forex markets to trade within narrow ranges and you can easily define the upper boundary or resistance and lower boundary or support by drawing horizontal lines. Once you see the price breaking above the resistance or breaking below the support, it can trigger a lot of pending orders and accelerate the directional movement in either direction that ends up creating trends. With breakout trading strategies, you can easily get into the trend early and ride it before the market started to range again.

Breakout Trading Strategies
Breakout Trading Strategies

we can see that the GBP/USD was ranging between the support around 1.2512 and the resistance around 1.2545. However, the moment price broke and closed above the 1.2545 level on the hourly timeframe, it triggered bulls to bid up to the price that created a strong uptrend. There are many different breakout trading strategies that use various technical indicators to confirm if a breakout is false or not. Nevertheless, if you can master breakout trading, it can prove to be an important weapon in your arsenal.

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