We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bearish
More View more
Real Time News
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.02% France 40: -0.02% Wall Street: -0.07% US 500: -0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/lcyEhCEfsA
  • $USDJPY may be set for a larger pullback on the back of a deteriorating risk environment amid the potential failure in US-China trade talks. Get your market update from @JMcQueenFX here:https://t.co/UOGT5xRX9v https://t.co/JLXsn96FQY
  • Poll: We've had some upgrades in a few growth forecasts from around the world recently and tomorrow brings the Nov PMIs (AUS, JPN, EZ and US). What do you think is the risk of a recession in 2020?
  • LIVE NOW: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • staring now -> https://www.dailyfx.com/webinars/3952937094787220994?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr https://t.co/fk3MmFxalj
  • That was a fast reversal in crude oil positioning among retail CFDs yesterday. Not as heavy a build up in short as we pressure 58 https://www.dailyfx.com/sentiment?CHID=9&QPID=917719 https://t.co/m1YFe8PEsM
  • LIVE IN 5 MINUTES: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.09%, while traders in France 40 are at opposite extremes with 82.08%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/pxnhohjlR2
  • LIVE IN 15 MINUTES: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Crude #oil prices are approaching confluence downtrend resistance just higher at 58.45/61. Get your crude oil technical analysis from @MBForex here:https://t.co/YtqEw4joWZ #OOTT https://t.co/WISQjuukP4
Trading Breakouts

Trading Breakouts

2011-05-02 07:14:00
Matthew Russell, Trading Instructor
Share:

Trading Breakouts

Many traders will attempt to initiate a position as the market breaks out (trades at a new high) or breaks down (trades at a new low). The reason being, many times if the market makes a new high it has the tendency to move significantly higher. However, the problem with this strategy is that often the market will trade at a new high, only to fall back down inside the trading range. When this occurs, the trader ends up buying the highest price, only to lose money on the trade. One way to avoid this problem is to wait for ‘confirmation’ in the trade. For example, if the market truly breaks out to the upside, the former ‘resistance’ line ‘should’ become the new support level. One way to execute this trade is as follows…

1. Wait for the market to break out of its range. Traders will usually wait for a complete candlestick to ‘close’ above the resistance level.

2. If this occurs, we can then initiate a position when the market pulls back to our new support level. We should pay special attention to the candlesticks at this point, and look for signs that it will not fall back below our (new) support level. A long wick which touches the new support level (previous resistance) and then closes well above support would be an ideal signal.

3. Traders will typically put protective stops under the support line. The rational is that if the market falls back inside the range, the breakout was nothing more than a false breakout. The opposite also holds true. If support is broken, this same price level may now become our new resistance level.

Weekly_Trading_Tips_May_2_body_x0000_i1025.png, Trading BreakoutsWeekly_Trading_Tips_May_2_body_x0000_i1026.png, Trading Breakouts

Matt Russell is a Trading Instructor here at FXCM. He regularly contributes to the Weekly Trading Lesson, Instructor Trading Tips, and creates a daily trading video called London Calling. To receive more timely notifications for his articles or videos, email instructor@dailyfx.comto be added to his distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.