Traders who follow the trend usually will always identify trends before opening a position. After finding a trend trader, then he started applying for entry breakout strategy. As we discussed in previous articles that there are many advantages if we are trading in accordance with the direction of the market.
Below you can see a prime example of a trending market in the AUDUSD. The pair has risen more than 449 pips since September 2012 to the price of 1.0488. Note the series of the highest point on the daily chart below. State makes a strong uptrend the price is ideal for purchases made. Well, this article will continue learning about the basics of trading trends, identifying potential opportunities to use a breakout strategy.
Ways breakout trading is very easy once you identify the market today from a high point and low market pattern will be seen in the 1.0597 resistance area in the AUDUSD. This acts as a price ceiling or resistance area for the pair. Breakout traders will wait for the price to pass the value of the price, and make new highs before entering the market. Traders will buy in the hope prices continue to rise and make the price could go higher in the market.
One of the most popular ways to trade the breakout is through the use of order entry. An entry order can be set through trading platform and allows you to set the order at a price that has been set. This method is very popular. No matter whether you are trading a position in front of the chart or not, if the price has reached the price of your message, the execution price would be running.
Stop and targets
After finding points to enter the market, next you should consider is the risk. Because of the placement of the order can be changed or dimodif, you can place them as you want. However, you should make a stop loss under an open position to anticipate if the price reverses.
To use the profit target per positive risk reward ratio that can be selected, typically using 1: 2, the stop loss: take profit. Traders can also choose to use a trailing stop to lock in profits or other methodologies that they choose according to their individual tastes.
