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
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Traders in the Euro have a big decision to make this weekend: if EUR/USD hits 1.20, will it continue to advance, consolidate or fall back? Get your $EURUSD market update from @MartinSEssex here:https://t.co/8hAhguZcEA https://t.co/kwtatozp3z
  • The bullish engulfing candle is one of the forex market's most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/Yg6ecRZZNr https://t.co/9SdceNYUEK
  • The bull flag pattern is a great pattern to add to a forex trader's technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/yOEvLjKnct https://t.co/imv2PnapzH
  • Defensive stocks have proven critically important when navigating stock market volatility. Find out what are the most defensive stocks here:https://t.co/TMcbMALtbw https://t.co/mmldxxEtsc
  • Dollar Index has broken major uptrend support and risks accelerated losses into the December open. Get your $USD technical analysis from @MBForex here:https://t.co/Txo8l8S1f1 https://t.co/YLVzP95JH8
  • The MACD is an indicator that uses exponential moving averages (EMA) to determine trend strength along with entry points based on crossovers. Find out how you can use the MACD as a buy/sell signal here: https://t.co/qxnP99uqTQ https://t.co/tGVqSZ2zK3
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/reMoYpqkQO
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/sqeRL7Rf7u
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/ukOW0dWJxf
  • Beautifully put. https://t.co/0fBsmUH6Pb
Breakouts for Forex Scalpers

Breakouts for Forex Scalpers

2013-05-08 19:00:00
Walker England, Forex Trading Instructor
Share:

Article Summary: Scalpers have many options when it comes to Forex strategy. Today we will discuss trading breakouts for short term market moves.

Scalpers can apply a variety of trading strategies when approaching the market once price direction is found. One of the most useful methodologies for trading short term moves is through the use of a breakout strategy. Today we will examine placing entry orders to take advantage of these short term moves when day.

A good candidate for breakout trading this week is the NZDUSD and will be our example for the day. The NZDUSD has consistently made a series of lower lows over the past week and has declined as much as 225 pips from its high at .8585. Traders looking for breakout entries for scalping will look to take advantage of this price momentum, in the event the pair moves to lower lows.

Learn Forex: NZDUSD 4Hour Trade

Breakouts_for_Forex_Scalpers_body_Picture_4.png, Breakouts for Forex Scalpers

(Created using FXCM’s Marketscope 2.0 charts)

In a strong down trend, traders will want to trade breakouts of support to lower lows. Support can be identified as a place where price is propped up on our chart, and for scalpers it is recommended to begin finding these areas using a 30minute chart as pictured below. The key is to wait for a series of higher lows to be formed, as the pair retraces against the primary trend. These lows can be connected using a trendline to identify exactly where support is on your chart. With support identified, traders will now wait for price to break through the declared pricing level.

To take advantage of a breakout, entry orders should be placed underneath support and the previously identified higher low on the graph. This way when price breaks through support traders will have orders set waiting for execution. Currently support is found at the last touch of our ascending trendline on the NZDUSD near the previous low at .8379. Traders will set entries beneath this value in expectations to be entered into the market upon the trend continuing with a price break towards lower lows.

Learn Forex: NZDUSD Breakouts

Breakouts_for_Forex_Scalpers_body_Picture_6.png, Breakouts for Forex Scalpers

(Created using FXCM’s Marketscope 2.0 charts)

As you can see breakouts can be an effective way to time market entries. However, in the event that a false breakout occurs it is always important to set a stop on your position. Traders scalping with breakouts can identify great Risk/Reward levels by placing stops above the aforementioned trendline or the use of a previous high. This way all sell based positions are exited in the event price attempts to break upwards to higher highs.

---Written by Walker England, Trading Instructor

To contact Walker, email instructor@dailyfx.com. Follow me on Twitter @WEnglandFX.

To be added to Walker’s e-mail distribution list, CLICK HERE and enter in your email information.

Would you like dozens of trade ideas every day with updated charts to identify major levels support and resistance on the currency pair you’re trading?

If so, click here to learn more about our Technical Analyzer on DailyFX Plus.

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

DISCLOSURES