News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
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
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
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • 🇲🇽 Consumer Confidence (NOV) Actual: 36.7 Previous: 37.6 https://www.dailyfx.com/economic-calendar#2020-12-04
  • RT @adamparsons: NEW DETAILS: EU Source tells me that, on Wednesday, Barnier told ambassadors that "it is better to have a good agreement n…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.33%, while traders in NZD/USD are at opposite extremes with 72.80%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/AO284XL9mG
  • Heads Up:🇲🇽 Consumer Confidence (NOV) due at 12:00 GMT (15min) Previous: 37.6 https://www.dailyfx.com/economic-calendar#2020-12-04
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/9pBSY0cTrz
  • Sources report that ECB Officials are said to be open to 12-month extension in bond buying program
  • Commodities Update: As of 11:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.33% Silver: 0.45% Gold: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/8O4aD3qYey
  • Forex Update: As of 11:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.20% 🇬🇧GBP: 0.14% 🇨🇦CAD: 0.01% 🇯🇵JPY: -0.12% 🇦🇺AUD: -0.24% 🇳🇿NZD: -0.36% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/jNCn3uZzBX
  • 🇮🇪 GDP Growth Rate QoQ (Q3) Actual: 11.1% Previous: -3.2% https://www.dailyfx.com/economic-calendar#2020-12-04
  • 🇮🇪 GDP Growth Rate YoY (Q3) Actual: 8.1% Previous: -3.2% https://www.dailyfx.com/economic-calendar#2020-12-04
Breakouts: How to Stay Away from Some Losing Trades

Breakouts: How to Stay Away from Some Losing Trades

2012-01-23 18:15:00
Jeremy Wagner, CEWA-M, Head of Education
Share:

As a trader, I have 3 objectives.

  1. Find winning trades
  2. Stay out of losing trades
  3. Rinse and repeat

A breakout strategy is a technical strategyto help a trader stay away from SOME losing trades. It is important to note you will still have losing trades with a breakout strategy. However, my point here is that with a breakout strategy you can be wrong on the trading idea and be kept away from SOME losing trades which reaches objective of #2 above.

Breakouts: How to Stay Away from Some Losing Trades

On January 11, 2012, I published an article on buying the USDCHF based on a breakout type of strategy. Since the published date of that article, the USDCHF has dropped approximately 250 pips. I was clearly wrong on my trading idea as the exchange rate moved lower rather than higher.

However, since the strategy called for a break above the upper Donchian channel AND since price never did break higher, I was kept out of entering into a losing trade. That is a good example of how I was wrong on the trading idea, but was kept away from a losing trade.

Now with prices much lower than before, the trading idea is still valid. This presents an opportunity to buy the currency pair at a much lower price. To do so, we simply use the upper channel as my entry trigger. The upper channel currently sits at .9524 so our entry order to buy would be at .9525 (1 pip above the upper channel). If prices do not push higher, then I continue to be kept away out a losing trade.

The last piece of the puzzle for a trader is to determine what trade size to place in your account, or how much effective leverage to use. An aggressive trader may utilize effective leverage amounts closer to 10 to 1. More conservative traders my utilize 3 to 1 or less.

To learn more about trading with the Donchian channels and the strategy, join us for a live webinar inside DailyFX Plus at 9pm ET on Wednesday January 25.

DailyFX Plus Live Classroom

---Written by Jeremy Wagner, Lead Trading Instructor, DailyFX Education

To contact Jeremy, email jwagner@dailyfx.com. Follow me on Twitter at @JWagnerFXTrader.

To be added to Jeremy’s e-mail distribution list, send an email with the subject line “Distribution List” to jwagner@dailyfx.com.

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

DISCLOSURES