🔥 Forex Breakout Strategy That Works! | Step-by-Step Guide on cTrader

Hello traders, Vladimir here from Home Trader Club. In this video, let's talk about how to trade breakouts. So by definition, breakout trading strategy is when traders attempt to make profits when the price breaks certain resistance or support, either a horizontal level, a flat level, or if it is going in a pattern like triangle or ranges. The idea of trading with the breakout is to join the expected anticipated momentum that either the buyers, if it breaks upside, or sellers, if it breaks down, should gain. And it is one of the most popular trading strategies. Theoretically, it makes lots of logic, right? It's, it sounds very logical to go and to join the developing momentum, and yet there are so many traps traders falling into. And in this video, I want to break down how I love to do breakout trading in a certain way with the needed accuracy that will help you to avoid traps. Of course, there is no such thing 100% guaranteed trades or 100% avoiding the traps, but with certain actions which I'll be showing in this video and with proper risk and money management, you will be always in front of others. You will be always ahead of others. You would have the edge to do better than others and to avoid many of the traps breakout trading strategies have in them. But before I start explaining all the technical concepts and what to do and not to do, all the detailed list, this video is presented on a cTrader platform. Why C-Trader? There are endless amount of reasons why C-Trader becomes a superior trading platform either for professional traders or retail traders like myself. And here you can see the list of the reasons, a short list of the reasons why I start to love this platform so much. Very fairly, I want to say for those of you who follow me, as you know, I'm a MetaTrader a fan. Everything I did, including the tools I developed, was for MetaTrader. It's not a secret. But recently, several months ago, I was exposed to cTrader, and the more I use that, the more I love it. And I believe cTrader will at some point become probably number one trading platform And would be ranked on the very top. So this video will be presented on the cTrader platform, as I mentioned, and for your knowledge, if you are not familiar with this platform or you would like to learn more about the platform and how either to use that or use trading strategies that can be bought with this platform, I created This very playlist dedicated fully for cTrader platform. Why? So you can very easily find all the relevant needed content that will help you to learn the platform and to learn how to trade using this platform. So watch this playlist, choose the videos you like here, or watch the— watch them all, and I hope you you will be able to benefit from that. Breakout strategies— there are tons, and I repeat, there are tons of ways to do that. And if you search online, ebooks, videos, courses are all dedicated for this subject. And yet, as many videos as there are— I got blank screen to draw Um, in simple way, um, as many ways there are to trade, but I can start to just— it's very hard to find the important little details, or I wouldn't call it the secret details, or, you know, the hidden gem or stuff like that, or the Holy Grail like so many others love to do that. But these are very important logical steps which you need to pay attention to. So breakout could be either above a high and then lead for the momentum, or below a low and lead for the momentum, or in some case above a trend line. For example, if there was a move down There is a falling trend line where you connect the highs, right? And with the breakout, you expect the momentum. And with that idea in mind, sometimes the market goes in a range, for example, something like that, and then makes the breakout. In any of these certain ways, there is what I love to call high probability entries, which simply means that when you find them, you have the edge that the trade would be delivering its profit. There will be no guarantee that the trade will profit. It's a market, okay? The market will do what the market has to do. Buyers will push the price up or sellers will push the price down eventually. You cannot, when you enter, know exactly if it's going to win or not. I mean, we all wish we could, right? Uh, but we can't. So what we can do is to trade on high probability setups. With these, I mean when the technical conditions line up and there are no signs against us, and when the risk reward is in our favor. And risk reward in our favor starts with basically everything of 1:1 and higher. Hey, the higher the better, but 1:1 is great enough. Why? Because with the proper tools, you would be able to trade with higher than 50% success rate. If you trade 50% success rate with 1:1 risk-reward, you would basically break even. But when you trade above the 50% success rate and you make an average more than 1:1, You suddenly start to make money, and this is a simple principle of numbers. Numbers will work for you if you will be able to keep these very few steps I will be showing in this video. So to present two trading strategies, or I should say it's one trading strategy for the breakout, but in two different. Concept, one to join with the trend, other on during the reversal. I will be going to the Home Trader Club members area and I want to share 2 of the recent trades we had in our club. One of them is the EUR/USD buy where we got in here and you can see the first target delivered. And the other one would be the EUR/GBP buy Which also delivered, in that case, both targets. So what do we have there? Let's go back to the charts and on the euro dollar. So that in this case, this is super simple. You want multi-timeframe synchronization in a given direction. As simple as that. To make it even simpler, bullish trend on higher time frame and bullish trend on lower time frame. Okay, either to the upside or to the downside. Now for that, I want to remind that bullish trend is a very simple condition when there is a sequence of highs and lows line up to the same direction, in that case to the upside. Bearish trend is when you have sequence of highs and lows to the downside. Okay, correction is what happens afterwards. You got the higher highs, higher lows. This is a correction, either a pullback, which is a retrace, or a correction, which could be 2 waves down or sometimes a range before the breakout. That's a usual, normal, natural price behavior. So in the case of the euro dollar, by the way, you can, you can find how you prefer to look at the charts, either with candlesticks, or if you want, you prefer line charts, or if you want bar charts, whatever makes it easier for you for analysis. Okay, you can go with the also highs and lows, you can go with the area chart. Again, everything that simply works for you, you can simply control in this beautiful navigator around this area. So if we take a look on the daily chart on the EUR/USD without breaking down indicators or waves or Or Elliott Waves or Fibonacci or anything simple. Take a look what happens here with the euro dollar. The momentum is bullish. Let me switch the line to yellow. It will be a bit easier to explain here. As you can see, right? The momentum is bullish. Sequence of highs and lows to the upside. There are other signs against. Are there contradicting waves? Was the low broken or anything like that? No. Does the indicator show anything against? Take a look here: higher highs on the chart, higher highs on the indicator. MACD moving average in that case. No, again nothing against. So the trend is still bullish, which means theoretically after retraces here we should be looking for buys. Now the bull that the trend is bullish on a daily chart, and as long as it did not change, we are looking on a lower time frame. For timings, and here is what happened on the four-hour chart after the daily completed the retrace. Now what? Let's do it even better. Let's plot the vertical line here so you can see. Okay, where it all starts. So this is the daily vertical line and then of the correction. If we go to the four-hour chart from this moment. The day— the 4-hour chart starts to do what? Sequence of highs and lows to the upside. So daily has this structure, 4-hour chart has this structure. The logic is that we are going in a bullish direction. At that point, I was waiting to see what will happen here. The reason I was waiting is only one reason. The daily chart had a strong supply zone here. Let me zoom out and I'll show it to you. Here we are. Let's put horizontal line supply here. By the way, um, I was asked how do I draw these lines. So if I click on the line and I hold Ctrl on my keyboard And I drag the line to anywhere else, it will duplicate itself. Beautiful tool, very useful. So in that around these peaks, that's a supply zone. That's where sellers were in control. So that's why I was waiting to see what will happen here. Moreover, while the market was making higher highs, MACD started to show lower highs, which usually means. If the trend is about to change, we will see the low broken and then push down. If the trend is not about to change, we should see either 2 waves correction or a range before continuation. So I want— I was waiting to see what will happen at that case. Now take a look what did happen here. Let's remove the line so it will be easier to explain. Okay, we got one rally, two. Now that's not classical two waves because we got high, low, high, and higher low, which turns that to be a possible ranging condition. And here is the first secret tool that you need to pay attention to when you are facing trending conditions. With a range, you will want to see the breakout happens either on spot number 5 or spot number 7. Meaning, if you count the peaks here, you got peak— I mean, peak or bottoms, of course, in the range— high, low, high, low. So that's 4 spots: 1, 2, 3, 4. Boom! 5 is the breakout. So either on the breakout on the 5th or 7th spot. That's what you want. While the higher time frame, you do not want to see signs against you, like for example no bearish divergence against you or no contradicting waves. So in our case, we got the break here on the 5th spot, right? We got this little range and that's high spot number 1, 2, 3, 4, boom. Breakout. Now when the break happens, what you will want to see that you also starts to recreate higher highs, higher lows. Low, high, low, higher high, right? So the range is broken and now you are basically recreating the highs. So why it's classical? Because in that case Usually you would want to protect below the recent low, and usually your rewards would be more bigger, right? And how do you set the rewards? If you go to the higher time frame where we started from, right, and you go and you plot the horizontal line, you want to aim to the previous peak. You might want to consider to include the spikes here, right? So we were aiming close to the 116 area. When I say we were aiming, this is what we had here in our trade in Home Trader Club. Classical, the previous peak. So when that is done, you know that you have now the option to calculate the risk-reward. So if that's your entry with the breakout here, right? You go and you ask yourself, okay, what is this risk? So take a look here what I do. You put a crosshair, which is you click on the center of the roller of your mouse, right? You click from any point and you hold the left button on your mouse and you just grab the mouse or take it to the place where you want to calculate the risk. And it calculates for you, right, the percentage change estimating if you trade 1 lot, the pips, which is about 80, and to the target you have about 120 pips, which makes that perfectly 1 to more than 1 risk-reward ratio. This is about 1 to 1.5 in that case. But that means you have the numbers working for you. If you risk 1%, you can earn about 1.5%. So that's an absolutely classical risk-reward to be involved in. Why? Because all you need in that case is to trade with 50% success rate, and with doing the technical things properly, you will be trading more than 50% success rate over the years. We have over 70% accuracy rate. Not every day, not every week, not even every month, but over all the years, over 70% success rate. And that is done not because we have Holy Grail systems or some secret indicators, absolutely not. Simply because we are doing things right, keeping the respect of the charts and the risk-reward management. That's it. So this is the first way to trade with the breakouts. Okay, trending structure on one time frame, higher time frame ideally, trending structure on the lower time frame lining up and synchronized perfectly in the same direction, correction in a range or 2 waves down— I call that ABCD— and a breakout. Risk-reward in your favor is what you want to aim to the next key level on the higher timeframe. Classical. The second trade I want to show would be the EUR/GBP buy. Let's go back to the Home Trader Club members area. And this is the buy trade we had again with the range of this— sorry, again with the break of this range. Oops, sorry. Little range break, retest, bounce. Easy decision as the risk-reward here would be, as you can imagine, Very positive. But why specifically buy here? And here is what I want to explain. Let's go to the euro pound. Euro pound. So take a look what happens here on the euro pound. Unlike with the euro dollar where the higher time frame was bullish, the daily chart here is still bullish. We do have the bullish momentum, higher highs, higher lows. Right? But in that case, we had some contradicting moves by making 3 lower highs, lower lows. So the trend is not obvious, even though it did hold this low and this low, of course, and the recent trend line, the bigger trend line. The contradicting waves is something to basically be careful with. But what I did personally like here, that at the end of these waves we experienced there We got a bullish divergence on the moving average of the MACD, which usually means a corrective movement either 2 waves or a range is very possible and very likely. So besides that, take a look what happens here. If I connect the lows, right, we got some spike down and instant retrace. Moreover, if we connect the highs of the trend line, it breaks the high of the trend line as well. So this is usually a sign that we should see either 2 corrective waves here or at least some range. Okay, and that was the plan here. So what happened after that? I was waiting to see for a trigger, and the trigger came when the You, you remember the trend line I drew there, right? We, we got the break, we got the flip. The market makes higher highs now. And take a look what happens. We start to recreate bullish momentum by making higher highs, higher lows. And that followed— you remember I was drawing the beginning, right? You got the momentum on the lower time frame, 4-hour chart, bullish divergence and break above the trend line and the high. One-hour chart making the bullish structure. Then we follow two waves down or a range, and then you want a breakout. Remember fifth or seventh spot. What we have here is one, two, three, four, boom! Five is the breakout. Again, classical condition. So in that case, what do we want to see on the higher time frame? We want to see that as potential targets, right? So if we take a look here, we have broken support becomes a resistance, and then we have the last high which acts as supply. That would use us as the target levels. Okay, that's what we will want to see. So once we got this break and the retest took place. Place, so it was here. We got the break, we got the retest. It was easy call. Oops, sorry. It was easy call to get for the buy around the 0.85 is our target level. It's slightly higher here. So this was the first target area. This is the second target area. And now all you have to do is to calculate the risk-reward ratio. So if this is your entry about this zone and this is your risk which is about 35 pips, the first target level is 60 pips, second target is 100 pips. You don't need to be a genius to understand this risk-reward ratio works in your favor. So look once again how it was done. 4-hour chart flips to the upside after bullish divergence, after breaking the 4-hour chart trend line and making the higher highs. 1-hour chart makes the trending structure followed by a range. After the range is broken, that's your chance to enter the trade. Make sure you have good risk-reward ratio aiming the next key level on the 4-hour chart. In our case, the next resistances or supply levels, uh, and that's your edge executing these trades. You will never have a guarantee that your trade would win, but you will have enough tools to make yourself win. By implementing the right trading strategies, by paying attention to the right technical methods and concepts, by respecting risk and money management. That's how you will be making money from profits from trading. So that was it for this video. As always, I hope you find value in it. 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