Quantcast
Channel: Binary Options Trading WordPress Theme
Viewing all articles
Browse latest Browse all 4

Look Out For Breakout

0
0

A breakout normally occurs when prices trade within a close-fitting range. The main idea behind breakouts is to identify a price range in which the present price will ‘break through’ as it moves towards a trading range. This means that you need to identify a potential break out level and further anticipate for it to prevail in the market. The stronger your breakout level, the more likely you will experience a strong move.

blog 1

When looking out for a breakout level, you also need to identify a market’s momentum. This means that you need execute your trades in times of low liquidity. This is usually towards the end of the market when the volume is stronger.

Key considerations for a breakout trading strategy

  • It is important to adhere to correct timing in order to avoid whipsaws and pullbacks that normally arise from a break.
  • Identify the right market for trading. Use currency pairs because they tend to have more breakout opportunities as compared to other binary assets. What’s more is that currency pairs carry the levels volatility required in breakout trading. Breakout requires an asset that shows a considerable amount of movement during a set period of time. As a result currency pairs works best.
  • Avoid early anticipation of a break: wait until your breakout level confirms.
  • Remember that defining your breakout level will highly depend on the type of asset you’re trading and the time period that has been set.

Beware of fake outs: this is simply a break out that is not real. There are times when the market tends to test a resistance or support line. In such an instance, the price can briefly shoot above or below and right after go down again to generate a spike. Avoiding a fake out largely depends on experience and an authentic trading system. It is important to note that choppy markets are characterized by fake outs. Smoother markets on the other hand are less likely to generate them.


Viewing all articles
Browse latest Browse all 4

Latest Images

Trending Articles





Latest Images