Sustained Break Forex Trading Strategy

written by expertadvisord on July 30, 2011 in Breakout Strategies and Forex Trading Systems with no comments




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A sustained break is generally referred to as a break that has the power to close above/below a trend channel or to close above/below a critical level of support or resistance. A sustained break hints a continued move in the same direction of the breakout. Let’s have a look at some trading examples below for better understanding how i trade sustained breaks in the forex market.

I. Sustained break of a critical level of support

The euro/dollar closes below the support line in a down trending market. This hints at continued move in the downtrend.

Trading idea*:

  • Go short on a sustained break below support.
  • Place a stop loss 3 pips above the most recent level resistance level.
  • Use a risk to reward ratio 1:2 or better.

*You can use your own preferred method of placing stop losses and taking profits.

II. Sustained break of a rising trend line in an up trend

The euro/dollar closes below the rising trend line in an up trending market. This hints a market reversal.

Trading idea*:

  • Go short on a sustained break below the trend line.
  • Place a stop loss 4-8 pips above the trend line at the “breakout” candlestick.
  • Use a risk to reward ratio 1:2 or better.

*You can use your own preferred method of placing stop losses and taking profits.

III. Sustained break of a rising trend line in a downtrend

The euro/dollar closes below the rising trend line in a down trending market. The market is likely to continue the downtrend.

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