Forex Breakout Trading
A simple Forex strategy which is used by traders is a price breakout strategy. You have probably heard the phrase “buy low and sell high”.
However, there are times, when you actually want to buy higher while selling lower. A breakout strategy does just that and it tends to work best during volatile market conditions or in strong
trends.
Definition of "Breakout"
It is a price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Traders will buy the underlying asset when the
price breaks above a level of resistance and sell when it breaks below support.
In practice, a breakout is most commonly used to refer to a situation where the price breaks above a level of resistance and heads higher, rather than breaking below a level of support and
heading lower. Once a resistance level is broken, it is regarded as the next level of support when the asset experiences a pullback most traders use chart patterns and other technical tools such
as trendlines to identify possible candidates that are likely to break through a support/resistance level.
Under the section "Forex Trading Systems" you can find a simple breakout strategy.
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trading on margin involves high risk and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your
investment objectives, level of experience, and risk appetite.