Breakout,Breakout,Breakout.

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This Thread is Ground Zero for Breakout trading technique that i recently have developed.
So before anyone asks any question,i intend to inform all the people posting in this thread to be a valuable part of contribution in statistics,that i intend to gather over here.
Kindly review what i intend to tell you and simply continue to try it out and post the results back here.
The above lines simply means i need you to do some work for me which will be statistical,and will require placing some trades on Demo.
The more traders trying it out the more statistics we will have.

I will start this thread by simply defining a breakout trade?

Breakout Trade: A breakout trade is a very heavy momentum trade,where significant momentum build up in your direction that within matter of few minutes you are in profits and back out of the trade.

What Should we target: As per my methodology i want you to target just 15-25 pips on every breakout,don't worry you will have at-least 2-4 breakout every day.
That is 15-60 $ a day. at 1 mini lot
or 500-3000 Rs a day.
If you leveraged your wins will be great.

At the risk of appearing to be foolish i will say that even pit traders realize that breakout trades are a piece of cake and bread and butter.

Let us continue and trade this extravagant method The Breakout.

Before We continue there are a number of Prerequisites in this system.
Which are as follows,you need to know:
Momentum
Some Technical Analysis
Support and Resistance.


According to my analysis and understanding the above terms and prerequisites are defined as follows:
Momentum: Momentum is associated speed at which the price is moving,let me clarify the things as follows.

A Currency pair which is at present moving Counter-trend is against momentum, because at any moments the bulls/bears or trend holders may push them to the real direction with force.

A Currency pair with average candle in 5 minute of 6 pips if is moving at 13 pips or more the momentum has built up.

Ie in general the speed and associated volatility of the market if increased then momentum of price has increased.

Momentum are of three types:

Short term Momentum: Associated with the intraday price movements or a defined way is to say associated with just a previous a few candlesticks.

Medium term Momentum: Associated with a medium period that is not justifying the short term movement,but in fact overall medium outlook of the market.
Eg: Price was rallying very fast but medium term momentum was down.
Or trend was up but medium term momentum was down and short term was also up.
In general momentum associated with the past many candlesticks is nmedium term momentum.
It is like looking at the horizon and watching at the lights in nearby villages switching on,while the light in your on tent is short term.
And the sunsetting down will be long term.
Why i give the above example because things near you will be closely watched by you but things far away also indicate important observations.

Long term momentum: Associated with primary trend,analogy as above.

For measuring long term momentum you can use Moving Averages

Short term Mom: By 5 EMA
Medium term by 60 SMA
Long Term by 125 SMA
Very Long term by 365 SMA or 200 SMA

Charts will help you to use these techniques later,i will post charts on this later.

TA: You need to know Support and Resistance and Important signs of reversal.
For S/R read my other thread Bouncing balls Pivot theorem and retrace play.

Never go against the trend, CT breakouts always lead to whipsaws.

What to do now:

Plot the above 4 MA's on your charts, on a 30 minute TF.
Look at the divergence of the MA's at a single point.
I notify there are 4 kinds of Divergences:

Long Mom Short Mom Med Mom Super Squueze: (LMSMMMSS):lol:
125 SMA and 5 EMA and 55 SMA squeeze.

Short Mom Med Mom Squeeze: 5 EMA,60 SMA flattening out together or Crossing over Nearing each other.

Med Mom Long Mom Squeeze: 60 SMA and 125 SMA flattening out nearing each other,Crossing over.

Very Long Mom and Med Mom and Short Mom Squeeze: Defining on basis as above.

What to do Now:​

You will notice on 30 min TF that whenever these squeezes happen then it is a breakout situation.
You just place a buy stop or sell stop order above and below the nearest good S/R and set target for 15-18 pips or break-even right after break.

Warning: If you don't follow the long term trend or daily trend you will become cleaned.
If you cannot define a good Point of Breakout on basis of S/R you will get whipsawed.

Don't try this at smaller TF below 30 min for now cauz even i cant get it below 5 min you need patience and learning,i practiced ie why i can do it at lower TF's. You will burn out without practice.


Chart Coming soon.

Don't be fooled by simplicity of this system or my words,Simple is great in market.
I tested this system over 100 consecutive trades and results were 86.5 % accuracy.
ie 86 winning trades 14 loosing.
10-12 trades were Break-evens cauz i wanted a runner,6-8 were runners more then 60 pips-100 pips.

See you next year People.

Merry Christmas​

and

Happy New Year​

Tavnaz, you'll probably agree with me when I say all systems are easy for the individual has the discipline to stick with his system. The complication comes only when it is preceded by diversion from the principles of the system.